Suppose that $ 10 , 000 is invested and the account grows to $ 13 , 566.25 in 5 yr. a. Use the model A = P e r t to determine the average rate of return under continuous compounding. Round to the nearest tenth of a percent. b. Using the interest rate from part (a), how long will it take the investment to reach $ 50 , 000 ? Round to the nearest tenth of a year.
Suppose that $ 10 , 000 is invested and the account grows to $ 13 , 566.25 in 5 yr. a. Use the model A = P e r t to determine the average rate of return under continuous compounding. Round to the nearest tenth of a percent. b. Using the interest rate from part (a), how long will it take the investment to reach $ 50 , 000 ? Round to the nearest tenth of a year.
Solution Summary: The author calculates the rate of return under continuous compounding with the help of the model A=Pert.
College Algebra with Modeling & Visualization (5th Edition)
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