Suppose $20,000 is invested in an account that returns 6% per year compounded continuously. (Round your answers to one decimal place.)

Question

(a) How long will it take for the investment to double?

(b) How long will it take for the investment to triple?

Answer 1

A = A₀e^rt = A₀e^0.06t

^{(a) 40000 = 20000e^0.06t; 2 = e^0.06t; ; 0.06t = ln2; t = ln2/0.06 = 11.6 years}

^{(b) 60000 = 20000e^0.06t; 3 = e^0.06t, t = ln3/0.06 = 18.3 years}