Description
A mathematical model for the Future Value of a savings account earning interest that is
compounded continuously is given by the equation FV = Pert, where FV is the amount after t years,
P is the principal amount invested at t = 0, and the principal is assumed to grow continuously at a
rate, r. How many years will it take the principal to triple if the annual rate is 12%?
Explanation & Answer
FV = Pert is the formula above but to calculate an amount after a certain number of years at a certain interest rate will use:FV = PV x (1 + r) ^n FV = Final value (equal of greater than triple of $1000, so in how many years will we get $3000 or more)T (or n) = Amount of years (what we are trying to solve for)PV = Present value ($1000; we are just using a simple number because the question did not give us one)r = our annual interest rate = ...
Review
Review
