Use logarithms to solve the problem Find the interest rate needed for an investm
ID: 2800343 • Letter: U
Question
Use logarithms to solve the problem Find the interest rate needed for an investment of $5600 to double in 5 yr if interest is compounded continuously. (Round your answer to two decimal places.) %/year Need Help?Read ItTalk to a Tutor -10.05 polnts TanApMath5 4.1.038. My Note Use logarithms to solve the problem How long will it take an investment of $10,000 to double if the investment earns interest at the rate of 9% compounded continuously? (Round your answer to two decimal places.) yr Need Help? Read It Talk to a TutorExplanation / Answer
Answer 1)
FV=PV*e^(r*t)
FV = future value
PV = Present value
r = rate
t =time
11200 = 5600*e^(r*5)
2 = e^(r*5)
Taking log on both sides
ln(2) = r*5
0.693147 = r * 5
r = 0.693147 / 5 =0.138629
r = 13.86%
Answer 2) Same formulae as above
20000 = 10000*e^(0.09*t)
2 = e ^(0.09*t)
Taking log on both sides
In(2) = 0.09 x t
0.693147 =0.09 xt
t = 7.70
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