Question

someone help?

how much interest is earned by investing 20000 at 8.5%p.a continuously compounded.At what year would you reach 1million ?

Answer 1

\[P=20000e^{1.085t}\]

Answer 2

\[1000000=20000e^{1.085t}\]

Answer 3

\[5=e^{1.085t}\]
\[ln(5)=ln(e^{1.085t})=1.085t*ln(e)=1.085t\]
\[t=ln(5)/1.085=1.48335\]

Answer 4

so 1.48335 is going to be the final answer?

Answer 5

yes. after 1.48335 years you will have $1000000. but it asks in which. year. since 1.48335 is more than one the answer is in the second year.

Answer 6

oh ok then thankyou