Investment: collectable toys
Current yield 5% per month
Rick: Extreamly high
Your inital value is 1000 dollars
what is the doubling time, time to reach 1800, and value after 10 years?
2 answers
This is compounded countinuously
5% per month compounded continuously means
A = Pe^(.05m)
To double, you need
e^(.05m) = 2
.05m = ln2
m = ln2/.05 = 13.8 months
so, slightly less than that to reach 1800 = 1000 * 1.8
In 10 years (120 months), 1000e^(.05*120) = 1000e^6 = 1000*403.4287935
A = Pe^(.05m)
To double, you need
e^(.05m) = 2
.05m = ln2
m = ln2/.05 = 13.8 months
so, slightly less than that to reach 1800 = 1000 * 1.8
In 10 years (120 months), 1000e^(.05*120) = 1000e^6 = 1000*403.4287935
4 answers