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A technology startup received a seed investment of $50,000\$50,000 and wants to grow this amount by investing it in a high-yield account with a 7%7\% interest rate compounded continuously. How many years will it take for the investment to reach $100,000\$100,000??\newlineUse the formula A=PertA = Pe^{rt}, where AA is the balance (final amount), PP is the principal (starting amount), ee is the base of natural logarithms (2.71828)(\approx 2.71828), rr is the interest rate expressed as a decimal, and tt is the time in years.\newlineRound your answer to the nearest tenth.

Full solution

Q. A technology startup received a seed investment of $50,000\$50,000 and wants to grow this amount by investing it in a high-yield account with a 7%7\% interest rate compounded continuously. How many years will it take for the investment to reach $100,000\$100,000??\newlineUse the formula A=PertA = Pe^{rt}, where AA is the balance (final amount), PP is the principal (starting amount), ee is the base of natural logarithms (2.71828)(\approx 2.71828), rr is the interest rate expressed as a decimal, and tt is the time in years.\newlineRound your answer to the nearest tenth.
  1. Identify values: Identify the values for PP, AA, rr, and tt. P=50,000P = 50,000 A=100,000A = 100,000 r=0.07r = 0.07 t=?t = ?
  2. Use formula and solve: Use the formula A=PertA = Pe^{rt} and solve for tt. 100,000=50,000imese0.07t100,000 = 50,000 imes e^{0.07t}
  3. Divide both sides: Divide both sides by 50,00050,000. 2=e0.07t2 = e^{0.07t}
  4. Take natural logarithm: Take the natural logarithm (\ln) of both sides to solve for t t . ln(2)=0.07t \ln(2) = 0.07t
  5. Divide by 0.070.07: Divide both sides by 0.070.07.\newlinet=ln(2)/0.07t = \ln(2) / 0.07
  6. Calculate value of t: Calculate the value of tt. t0.6931470.07t \approx \frac{0.693147}{0.07} t9.9021t \approx 9.9021
  7. Round to nearest tenth: Round to the nearest tenth. t9.9t \approx 9.9 years

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