Solve the problem.
-If $4000 is invested in an account that pays interest compounded continuously, how long will it take to grow to $9800 at 8%? Round to the nearest tenth.
A) 8.9 years
B) 8.7 years
C) 11.2 years
D) 10.8 years

Question

Quizplus · Accepted Answer

The formula for continuous compounding is $ A = Pe^{rt} $. Here, $ A = 9800 $, $ P = 4000 $, $ r = 0.08 $. Solving for $ t $, we get $ t = \frac{\ln(9800/4000)}{0.08} \approx 11.2 $ years.

Solve the Problem. -If $4000 Is Invested in an Account That Pays Interest