Question

How long will it take a principal investment of $6000 to grow to $12,000 if the investment earns interest at the rate of 8%/year compounded continuously?

Answer 1

The formula for continuously compounded interest is given by:

where,

A=Amount

P=Principal

e=Mathematical constant e

r=rate of interest

t=Time in years

According to question;

P=$6000, A=12000, r=8%

Therefore it will take 8.664 years for theprincipal investment of $6000 to grow to $12,000.