The parents of a 3-year-old child put $30,000 into an account with the hope that the amount will grow to $180,000 when the child starts college in 15 years. Wharate of continuously compounded interest

Question

round to the nearest whole number

Answer 1

the underlying formula that you want to use here for continuous compounding is

A = Pe^(rt)

for this scenario that means taking

r = ln(A/P) / t

r = ln(180000/30000) / 15

r = ln(6) / 15 = 0.11945

which is 11.95% when rounding to 2 decimal places

Answer 2

180000 = 30000e^15r

6 = e^15t

ln 6 = 15t

Can you solve for t and answer?