Question

"Modeling Compound Interest In Exercise, complete the table for an account in which interest is compounded continuously.

Amount Amount
Initial Annual Time to after 10 after 25
investment rate double years years
$2000 7 years

Answer 1

This problem requires us to calculate, the value of investment after 10 and 25 years, and also tell the time after which intial investment amount will double. Investment rate and initial investment amount is given in the question.

Value of investment after 10 year = 2000(1+7%)^10 = $ 3,934

Value of investment after 25 year = 2000(1+7%)^25 = $ 10,855

Time after which investment amount double (n)

4000 = 2000 (1.07)^n

Log 2 = n log 1.07

n = 10.2 years