Question

How long will it take to triple an initial investment earning 4.75% annual interest that is compounded continuously?

What amount presently must be invested earning 5.25% compounded daily for the next 10 years so that it will grow up to be worth $25,000 10 years from now?

Answer 1

`1. F= Pe^(ni) \\ \\3P= Pe^(ni) \\ \\3 = e^(0.0475n) \\ \\ln(3) = ln(e^(0.0475n)) \\ \\ln(3)= 0.0475n \\ \\n= (ln3)/(0.0475)=23.18`


`2.F=P(1+ (i)/(t))^(tn) \\ \\25000 = P(1+(0.0525)/(360))^(360*10) \\ \\ P = (25000)/((1+(0.0525)/(360))^(360*10)) =19470`