http://www.onlinecalculatorfree.org/law-of-uninhibited-growth-calculator.html#.WsHVGDMh02w
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I saw your question earlier in the day but was unable to help you.
Uninhibited Growth Model. This is an example problem from the book and need help figuring it out?
a) If $3500 is invested in an account that pays 5% interest compounded continuously, how long will it take to grow to $7000.
b) How much money will the account be worth in 20 years.
2 answers
As MsPi's webpage shows the general formula for continuous growth is
amount = principal e^(kt), where k is the perodic rate as a decimal and t is the number of periods (in most cases the period is in years, like in your question)
3500 e^(.05t) = 7000
e^(.05t) = 2
take ln of both sides and use your log rules
.05t (ln e) = ln 2
.05t = .693147...
t = appr 13.9 years
for the second part simply replace t = 20 in the formula
amount = principal e^(kt), where k is the perodic rate as a decimal and t is the number of periods (in most cases the period is in years, like in your question)
3500 e^(.05t) = 7000
e^(.05t) = 2
take ln of both sides and use your log rules
.05t (ln e) = ln 2
.05t = .693147...
t = appr 13.9 years
for the second part simply replace t = 20 in the formula
1 answer