Question

Sandy invested $2,500 in a corporate bond that pays 9% interest compounded continuously. How long will it take for Sandy's investment to triple? (Reminder: The formula for interest compounded continuously is , where A is the amount in the account, P is the principal, r is the interest rate, and t is the time in years.)

What equation correctly shows the information from the problem substituted into the equation?

Answer 1

Do you know the formula?
A = Pe^(rt)

Answer 2

^^ That's the correct formula. But there's 2 formulas for compound interest, don't use the above formula for every equation.

Answer 3

A= Pe^(rt) is for equations dealing with compounding continuously

Answer 4

2,500=Pe^(9 3)

?

Answer 5

^^ yep, there's also a formula for dealing compound monthly, weekly, etc. Just didn't want OP to think there's only one formula

Answer 6

No, 2500(3) = 2500e^(.009t)

Answer 7

P is the initial amount Sandy puts in, which is 2500. What the equation is equal to is the total amount AFTER the investment is down being compounded

Answer 8

O.k got it. So if I were to divide both sides of the equation by 2,500... The result would be... 3=e^(.09t)?

Answer 9

Yes, then you use one of the rules of logs to take out the e and solve for t

Answer 10

Basically rewrite the exponential equation (stated above) in logarithmic form?

Answer 11

I suggest you use natural log.

Answer 12

Yeah, what Denebel said, so it becomes, ln3 = .09t

If denebel would kindly check for me, I haven't dealt with logs, lns etc. in years

Answer 13

Denebel? Is this correct? I would really appreciate your confirmation :)

Answer 14

It's correct, I solved it and worked it out, and checked, the answer you get works

Answer 15

Yes