An investor wants to analyze the earnings of a mutual fund account. Three years ago, the value of the account was $24,000 and it is now worth $31,200. If the account is compared to a bank account paying interest that is compounded continuously, what interest rate rounded to the nearest hundredth of a percent would the bank account have to pay to match the mutual fund account’s earnings? (Assume the only deposit was to open the account.)

Question

amistre64 · Answer

how we doin?

anonymous · Answer

i need help with this now

amistre64 · Answer

3 years ago, the value of the account was 

$24,000 and it is now worth 
$31,200.  compounded continuously, 

A = Pe^(rt)

A/P = e^(rt)

ln(A/P) = rt

ln(A/P)
------ = r
     t

ln(31200/2400)
-------------- = rate
          3

amistre64 · Answer

i missed a 0  .. spose to e 24000 :)

amistre64 · Answer

what do you get when you plug this into a calculator?

anonymous · Answer

.262?

amistre64 · Answer

lol ... i get .08745....  round as needed