Question

an initail investment of $350 is worth $429.20 after six years of continuous compounding. Find the annual interest rate

Answer 1

continuous interest formula is Pe^(rt) just remember "pert"

P stand for principle
r is interest rate
t is time\[429.20=350e^{(6r)}\]solve for r. You are going to have take the natural log of each side

Answer 2

thats what confuses me

Answer 3

???

Answer 4

ok I'll show you the steps

Answer 5

Lets get e by itself first\[\frac{429.20}{350}=e^{(6r)}\]\[\ln\frac{429.20}{350}=\ln e^{(6r)}\]ln has base e. \[\ln a^x = b \rightarrow x \ln a=b \]\[\ln e = 1 \]\[\ln\frac{429.20}{350}=6r\ln e\]\[\ln\frac{429.20}{350}=6r\]\[{\ln\frac{429.20}{350} \over 6}=r\]You plug it into a calc

Answer 6

thanks so much!!