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How do you do this PeRT question?
You see the word ”continuous” so think
”Pert” with this one.
Find the time required for a $1000 invest-
ment to double at interest rate of 8%, com-
pounded continuously.
Answer in units of years.
1 Answer
- workoutgirl1235Lv 61 decade agoFavorite Answer
A = Pe^(rt)
without a calculator, there is a rule of 70 or 72, which says 72/r or 72/r, depending on your book- 70 is more accurate
(This comes from the fact that ln2 = approx .69 See actual problem.)
without a calc, 70/8 = 8 3/4 years to double
with a calculator
Doubling means A = 2P -->
e^(rt) = 2
e^(.08t) = 2
t = (ln2)/.08 = 8.66 years
