How long will it take for an investment of $2000 to double in value if the interest rate is 8.5% per year, compounded continuously? (Round your answer to two decimal places.)

Question

anonymous · Answer

Continuous compound interest formula:

Amount after time t = Pe^rt
P is the principal (initial amount), r is rate, t is time

You want your $2000 to double, so your amount after time t is going to be $4000.

Therefore,

4000 = 2000e^(0.085*t)

Solve by dividing both sides by 2000, log both sides, etc.