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Alexa invested 54,000 in an account paying an interest rate of 4% compounded continuously. Assuming no deposits or withdrawals are made, how long would it take, to the nearest year, for the value of the account to reach 106,200?

Solution

Alexa invested 54, 000 in an account paying an interest rate of 4% compounded continuously. Assuming no deposits or withdrawals are made, how long would it take, to the nearest year, for the value of the account to reach 106, 200?

Solution

Time : 16.91

Solution steps

Translate the problem into an equation:

106200 = 54000 e^{0.04 t}

Solve for

t, 106200 = 54000 e^{0.04 t} : t = 16.91

Time : 16.91

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