## Related questions with answers

This exercise concerns a single investment of $10,000. Find the continuous interest rate per year, yielding a future value of$20,000 in the given time period. 60 years

Solution

VerifiedConsider Present value is $10,000$ and future value is $20,000$ in 60 years then the future value is

$B=P e^{rt}$

Here $B$ is future value and $P$ is present Value

Consider a single deposit of $\$10000$ and future value of $\$20000$ in 60 year time period.

$\begin{align*} 20000 &=10000 e^{r(60)} \\ 2 &=e^{r(60)} \end{align*}$

$\begin{align*} \ln 2 &=\ln e^{r(\infty)} \\ \ln 2 &=r 60 \\ \frac{\ln 2}{60} &=r \\ r &=0.0115 \end{align*}$

$\begin{align*} r &=0.0115 \times 100 \\ &=1.15 \% \end{align*}$

Thus the interest rate $1.15 \%$ which yields a future value of $20,000$ in time period of 60 years

## Create an account to view solutions

## Create an account to view solutions

## Recommended textbook solutions

#### Thomas' Calculus

14th Edition•ISBN: 9780134438986Christopher E Heil, Joel R. Hass, Maurice D. Weir#### Calculus: Single and Multivariable

7th Edition•ISBN: 9781119320494Andrew M. Gleason, Hughes-Hallett, William G. McCallum#### Calculus: Early Transcendentals

8th Edition•ISBN: 9781285741550 (3 more)James Stewart#### Calculus: Early Transcendentals

9th Edition•ISBN: 9781337613927Daniel K. Clegg, James Stewart, Saleem Watson## More related questions

1/4

1/7