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Word problem help

Suppose $5000 is invested at interest rate k, compounded continuously, and grows to $6954.84 in 6 years. Find interest rate. Find exponential rate, find balance after 10 years, find the doubling time?
 
help!!!!
12/4/2013 | Erica from Seattle, WA

1 Answer by Expert Tutors

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William S. | Experienced scientist, mathematician and instructor - WilliamExperienced scientist, mathematician and...
4.4 4.4 (10 lesson ratings) (10)
0
Continuously compounded interest formula:
 
A = Pekt
 
In this case we know A = $6954.84, t = 6 years and P = $5000.00.
 
To solve for k
 
ln(A) = ln(P) + kt
 
kt = ln(A) - ln(P)
 
k = [ln(A) -ln(P)]/t = (0.33)/6 years 
 
k = 0.055 or 5.5% per year
 
12/4/2013 | William S.

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