The amount of money in an account with continuously compounded interest is given by the formula A = Pe^rt, where P is the principal, r is the annual interest rate, and t is the time in years. Calculate to the hundredth of a year how long it takes for an amount of money to double if interest is compounded continuously at 6.5%.

A. 21.33 years

B. 7.11 years

C. 5.33 years

D. 10.66 years

Question

The amount of money in an account with continuously compounded interest is given by the formula A = Pe^rt, where P is the principal, r is the annual interest rate, and t is the time in years. Calculate to the hundredth of a year how long it takes for an amount of money to double if interest is compounded continuously at 6.5%.

A. 21.33 years
		
B. 7.11 years
		
C. 5.33 years
		
D. 10.66 years

tkhunny · Answer

Have you considered A = 2P?

tkhunny · Answer

Also, consider the Rule of 72.

72/6.5 = 11.077

I'm kind of leaning toward D, already.

anonymous · Answer

so is the answer D

tkhunny · Answer

I don't know.  You tell me.  Use the first hint and calculate the exact value,