Question

Lucy invested $6,000 into an account that earns 6% interest compounded continuously. Approximately how long will it take for Lucy's investment to be valued at $25,000?

Answer 1

23.79 years

Explanation:

Remember the formula `A = Pe^(rt)`. A is amount; P is starting amount; e is the constant; r is the rate of interest; t is time.

`$25,000 = $6,000 times e^(0.06t)`
`25/6 = e^(0.06t)`
`ln(25/6) = 0.06t`
`t = ln(25/6)/0.06`
#t = 23.79 years