how long would it take $8,000 to grow to $40,000 at 7% compounded continuously? Round your answer to the nearest tenth of year

Answer 1

Use the formula for compounded interest: A = Pe^rt where A is the final amount, P is the initial amount, r in the rate as a decimal, and t is the time.

40000 = 8000 e^0.07t (Divide both sides by 8000)

5 = e^0.07t (Take the natural log of both sides)

ln 5 = 0.07t (Divide both sides by 0.07)

ln 5 / 0.07 = t

t = 23.0 years