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# if you invest \$5000 into an account that compounds interest continuously and you have 7130.90 after 5 years what is the interest rate

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if you invest \$5000 into an account that compounds interest continuously and you have 7130.90 after 5 years what is the interest rate

Apr 10, 2021

#2
+1

Continuous compounding  formula

A = P * e^(r * t)

7130.90    =  5000 * e^( r * 5)

(7130.90  /  5000)  =  e^( 5r)       take the  Ln  of  both  sides

Ln  ( 7130.90  / 5000)  = Ln e^(5r)       and we  can write

Ln ( 7130.90  / 5000) =  5r

Ln (7130.90 / 5000)   / 5   = r  ≈  7.1%   Apr 10, 2021

#1
+2

Hey there, Guest!

7130.90-5000= 2130.9

2130.9/5= \$426.18

Hope this helped! :)

( ﾟдﾟ)つ Bye

Apr 10, 2021
#2
+1

Continuous compounding  formula

A = P * e^(r * t)

7130.90    =  5000 * e^( r * 5)

(7130.90  /  5000)  =  e^( 5r)       take the  Ln  of  both  sides

Ln  ( 7130.90  / 5000)  = Ln e^(5r)       and we  can write

Ln ( 7130.90  / 5000) =  5r

Ln (7130.90 / 5000)   / 5   = r  ≈  7.1%   CPhill Apr 10, 2021