An initial investment of $9000 grows at an annual interest rate of 5% compounded continuously. How long will it take to double the investment?
A)13.86 years
B)14.86 years
C)14.40 years
D)13.40 years
E)1 year

Question

Quizplus · Accepted Answer

The formula for continuous compounding is A = Pe^(rt). To double the investment, A = 2P. Solving 2 = e^(0.05t) gives t = ln(2)/0.05 ≈ 13.86 years.

An Initial Investment of $9000 Grows at an Annual Interest