Engineering Board Exam Reviewer · Continuous Compounding · medium
How long will it take money to double if invested at 7% compounded continuously?
- ≈9.90 years
- ≈10.5 years
- ≈8.66 years
- ≈14.3 years
Answer
A. ≈9.90 years
Solution
2=e0.07t t= 2/0.07 9.90 years.
More Continuous Compounding questions
- Find the present value needed to accumulate to P20,000 in 4 years at 5% compounded continuously.
- Find the nominal rate compounded continuously equivalent to an effective annual rate of 10.52%.
- For the same nominal rate and time period, which yields a higher compound amount: continuous compounding or annual compounding?
- Find the compound amount of P10,000 invested at 6% compounded continuously for 5 years.
- Find the effective annual rate equivalent to a nominal rate of 8% compounded continuously.