Please help me with this problem:

What rate of interest compounded continuously is required to double an investment in 5 years? (Round your answer to one decimal place.)

Question

Please help me with this problem:

What rate of interest compounded continuously is required to double an investment in 5 years? (Round your answer to one decimal place.)

anonymous · Answer

We have the sequence
x1, x1*q, x1*q^2, x1^q3, x1^q4,x1*q^5 and q^5=2. q = $$\sqrt[5]{2}$$ = 1.148.
q represents the (principal + interest) / principal and so to find the interest/principal (interest rate) we take 1.148 - 1 = 0.148
And so the interest rate should be 14.8%