Question #293317

A bank pays interest continuously at the rate of 6%. How long does it take for a deposit of Q0 to grow in value to 2Q0






1
Expert's answer
2022-02-03T09:33:31-0500

Continuously Compound Interest:


Q(t)=Q0ertQ(t)=Q_0e^{rt}

Then


ert=QQ0e^{rt}=\dfrac{Q}{Q_0}

t=ln(Q/Q0)rt=\dfrac{\ln(Q/Q_0)}{r}

Given

r=0.06,Q=2Q0r=0.06, Q=2Q_0

t=ln(2Q0/Q0)0.0611.55(years)t=\dfrac{\ln(2Q_0/Q_0)}{0.06}\approx11.55(years)


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