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mr smith invested 200000 into a fund that compounded interest continuously. Ten years later his account had a balance of 220000. what interest rate did his investment earn

Solution

Solution

Rate : 0.95765 \dots %

Solution steps

Translate the problem into an equation:

220000 = 200000 (1 + \frac{r}{1})^{1 \cdot 10}

Solve for

r, 220000 = 200000 (1 + \frac{r}{1})^{1 \cdot 10} : r = 0.95765 \dots %

Rate : 0.95765 \dots %

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