MATH SOLVE

2 months ago

Q:
# Find the doubling time of an investment earning 7% interest if interest is compounded continuously

Accepted Solution

A:

Answer:The doubling time of this investment would be 9.9 years.Step-by-step explanation:The appropriate equation for this compound interest is A = Pe^(rt), where P is the principal, r is the interest rate as a decimal fraction, and t is the elapsed time in years.If P doubles, then A = 2PThus, 2P = Pe^(0.07t)Dividing both sides by P results in 2 = e^(0.07t)Take the natural log of both sides: ln 2 = 0.07t.Then t = elapsed time = ln 2 --------- = 0.69315/0.07 = 9.9 0.07The doubling time of this investment would be 9.9 years.