How long would it take to grow your investment from $10,000 to $120,000 at the rate of 10% compounded continuously?

Question

Applying the concept 

Answer 1

Future Value = Present Value * e^rt where i is the interest rate and t is time periods

 

$120,000 = $10,000 * e^.1t 

 

120000/10000 = e^.1t 

 

12= e^.1t 

 

take natural log of both sides

 

ln(12) = .1*t

ln(12)/.1 = t

 

t = 24.85 years

 

to check answer, use 24.85 years in the first equation

 

e^.1*24.85 = 12

 

12*10,000 = 120,000