If $4,000 is put aside in a money market account with interest compounded continuously at find the time required for the account to earn $1000. Round to the nearest month.

Answer 1

5,000 = 4,000e^rt

5/4 = e^rt

ln(5/4) = rt

t = ln1.25/r = about .223/r

r = the interest rate

if r = .1 = 10%

then the time needed to add $1000 to $4000 = t = .223/.1 = 2.23 years = 2 years and about 2 3/4 months