Determine the interest rate/ Determine the initial investment.

Question

Alice makes an initial investment on September 1, 2000 into a bank account on that compounds continuously at an unknown rate.

On September 1, 2002, the balance was $270.00. On September 1, 2012, the balance was $440.00. Answer the following.

 

Determine the interest rate:

Determine the initial investment:

Answer 1

A = pe^rt

270 = pe^2r

270/e^2r = p

 

440 = pe^12t

440/e^12t = p

 

270/e^2r = 440/e^12r

 

Can you solve for r?

What was the initial investment?