Compounded continually

Question

Compounded continually

A=Pe^rt

You have invested $8,500 at an annual interest rate of 5.6% compounded monthly.

If you compounded continuously, how much months will it take to reach $12,456?

Answer 1

A = 12,456

P = 8,500

r = 5.6% = 0.56 (Do not use direct % values in this formula)

You have to find 't'. 

To get rid of exponential function from the formula using natural logarithm. The answer to your question on bacteria growth shows how to go about it.

Beware that your answer for t will be in years. To find out the number of months it will take, multiply your answer by 12.

Let me know if something is not clear.

Good Luck !