Adam deposited $1500 in an account in which interest is compounded continuously. The annual rate of interest is 2.5 %. How long does it take for his money to double?
The time needed to double the deposited amount of $1500 to $3000 is calculated with the following equation
Where, FV is the future value of the investment
P is the initial principal amount
r rate of interest
t is time period
3000 = 1500*e^0.025t
e^0.025t = 3000/1500
lne^0.025t = ln2 (taking natural natural log on both sides)
Since lnex =x
0.025t = ln2
t = 0.693147/0.025
t = 27.73
Therefore, it will take 27.73 years for the investment to double.
Get Answers For Free
Most questions answered within 1 hours.