Find the interest rate needed for an investment of $4300 to double in 3 yr if interest is compounded continuously. (Round your answer to two decimal places.)

Question

anonymous · Answer

Start by using the continuous compounding formula:  $$A=Pe ^{rt}$$

anonymous · Answer

Where A is your final amount, P is your original investment, e is Euler's constant (the e^ button on a calculator), t is time, and r is the rate written as a decimal.

anonymous · Answer

Your equation would look like $$8600=4300e ^{3r}$$

anonymous · Answer

To solve, get the exponential part by itself by dividing both sides by 4300.  Then, get the 3r out of the exponent by taking the natural logarithm of both sides (the ln button on your calculator).  This will cancel out the e on the right side and leave 3r.  Finally, divide both sides of the equation by 3.

anonymous · Answer

thank you