Question

suppose a 1000$ was invested in an account with interest compounded continously. If at the end of 5 years the account holds 2000$. what was the interest rate on the account ? i just dont know how to solve for r

Answer 1

I have already shown you the method. See your previous question.

Answer 2

but how do i replace for r ?

Answer 3

this is compounded continuously...

Answer 4

The formula for continuous compounding is
\[A=P \times e ^{rt}\]
\[2000=1000\times e ^{5r}\]
Taking logs of both sides:
\[\ln 2000=\ln 1000+5r\]
\[5r=\ln 2000-\ln 1000\]
\[r=\frac{\ln 2000-\ln 1000}{5}\]

Answer 5

0.06 ?

Answer 6

or 0.14?

Answer 7

\[r=\frac{\ln 2000-\ln 1000}{5}=0.1386\]

Answer 8

thanks

Answer 9

You're welcome :)