lee has invested $2800 in a venture company. he receives 6.5% interest a year, compounded continuously. How long will it take his money to d

Question

lee has invested $2800 in a venture company. he receives 6.5% interest a year, compounded continuously. How long will it take his money to double?

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Aubrey 3 weeks 2021-12-27T07:42:17+00:00 1 Answer 0 views 0

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    2021-12-27T07:43:25+00:00

    Answer:

    It’ll take 10.6638 years to double his money.

    Step-by-step explanation:

    Since the invested capital is compounded continuosly we need to use the apropriate formula shown below:

    M = C*e^(r*t)

    Where M is the final value, C is the initial value, r is the rate of interest and t is the total time elapsed. In this case we want to  double our investment, since the amount invested was 2800, then we need to have a final value of 2*2800 = 5600. Applying these values to the formula:

    5600 = 2800*e^(0.065*t)

    2800*e^(0.065*t) = 5600

    e^(0.065*t) = 5600/2800

    e^(0.065*t) = 2

    ln(e^(0.065*t)) = ln(2)

    0.065*t = ln(2)

    t = ln(2)/0.065 = 10.6638 years

    It’ll take 10.6638 years to double his money.

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