A promissory note will pay $49,000 at maturity 7 years from now. If you pay $24,000 for the note now, what rate compounded continuously would you earn?
The investment would earn about ___% compounded continuously. (round to three decimal points as needed).
the formula is:-
,
where, A = amount
P = principal
t = time in years.
r = rate of interest.
here, given data are:-
P= $ 24000
Q= $ 49000
t = 7 years
so, according to the formula we have,
so, r = 0.10197*100% = 10.197 %
The investment would earn about 10.197 % compounded continuously.
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