How long will it take $20,000 to double if it is invested in a savings account that pays 5.5% annual interest compounded continuously? Round to the nearest year.
A)19 years
B)8 years
C)11 years
D)12 years
E)13 years

Question

Quizplus · Accepted Answer

To find the time it takes for an investment to double with continuous compounding, you can use the formula $t = \frac{\ln(2)}{r}$, where $t$ is the time in years and $r$ is the annual interest rate (in decimal form). For a 5.5% interest rate, $r = 0.055$. Plugging the values into the formula gives $t = \frac{\ln(2)}{0.055} \approx 12.6$ years. Rounding to the nearest year gives 13 years.

How Long Will It Take $20,000 to Double If It