Question

If you deposit $1,000 into a bank account that pays 4% interest compounded continuously, how long will it take the account to grow to $2,000?

Answer 1

use simple interest formula.

Answer 2

And what would be a simple interest formula?

Answer 3

You use Pe^(r)(t), don' t you?

Answer 4

you can not use simple interest formula since the compounding is continuous

Answer 5

Pe^(r)(t) is the continuous compounding formula, isn't it?

Answer 6

yes it is so use that one

Answer 7

ok thank you

Answer 8

i don't know if this is right but I used A = Pe^rt right,
set A to 2000, divide by a thousand, then ln to solve for t, yes, no?

Answer 9

I used 2000=1000(1.04)^t and then solved for t.

Answer 10

edmag16, the equation 2000=1000(1.04)^t only works if you are compounding interest annually

however, you want to compound interest continuously

Answer 11

just solve for t