Samantha invested 880 in an account paying an interest rate of 3.1% compounded continuously. Assuming no deposits or withdrawals are made, how long would it take, to the nearest tenth of a year, for the value of the account to reach 1,270?

Solution

Samantha invested 880 in an account paying an interest rate of 3.1% compounded continuously. Assuming no deposits or withdrawals are made, how long would it take, to the nearest tenth of a year, for the value of the account to reach 1, 270?

Solution

Time : 11.83

Solution steps

Translate the problem into an equation:

1270 = 880 e^{0.031 t}

Solve for

t, 1270 = 880 e^{0.031 t} : t = 11.83

Time : 11.83

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