finance math + logarithm problem

Mathematics
Tutor: None Selected Time limit: 1 Day

Use logarithms to solve the problem. Find the interest rate needed for an investment of $5900 to double in 4 yr if interest is compounded continuously.

Dec 9th, 2014

A = P(1 + r/n)^nt

11800 = (5900)(1 + r/1)^(1)(4)

11800 = (5900)(1 +r)^4

Divide both sides by 5900

2 = (1 + r)^4

4th root of 2 = 1 + r

r = 4th root of 2  +1

r = 2.189 = .02189%

Hope this helps!

Dec 9th, 2014

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