Question
suppose you inves $8000 and the value grows to $12000 in 10 years. What yearly interest did you earn assuming that interest is coumpounding continuously?
Answers
Henry
Pt = Po*e^rt = 12000.
8000*e^10r = 12000,
Divide both sides by 8000:
e^10r = 12000 / 8000 = 1.500,
Take ln of both sides
10r*lne =ln(1.500),
10r*1.00 = 0.4055,
Divide both sides by 10:
r = 0.0406 = 4.06% APR.
8000*e^10r = 12000,
Divide both sides by 8000:
e^10r = 12000 / 8000 = 1.500,
Take ln of both sides
10r*lne =ln(1.500),
10r*1.00 = 0.4055,
Divide both sides by 10:
r = 0.0406 = 4.06% APR.