Bytelearn - cat image with glassesAI tutor

Welcome to Bytelearn!

Let’s check out your problem:

An art collector invested $40,000\$40,000 in a trust fund with a 5.9%5.9\% interest rate compounded continuously to save for future art acquisitions. How long will it take for the trust fund to grow to $80,000\$80,000??\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. An art collector invested $40,000\$40,000 in a trust fund with a 5.9%5.9\% interest rate compounded continuously to save for future art acquisitions. How long will it take for the trust fund to grow to $80,000\$80,000??\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 given values: A = $80,000\$80,000 P = $40,000\$40,000 r = 55.99\% = 00.059059
  2. Use formula: Use the formula A=PertA = Pe^{rt}: 80,000=40,000imese0.059t80,000 = 40,000 imes e^{0.059t}
  3. Divide sides: Divide both sides by 40,00040,000: 2=e0.059t2 = e^{0.059t}
  4. Take ln: Take the natural logarithm (ln\ln) of both sides: ln(2)=ln(e0.059t)\ln(2) = \ln(e^{0.059t})
  5. Simplify: Simplify using the property of logarithms ln(ex)=x\ln(e^x) = x: ln(2)=0.059t\ln(2) = 0.059t
  6. Solve for tt: Solve for tt:\newlinet=ln(2)0.059t = \frac{\ln(2)}{0.059}
  7. Calculate value: Calculate the value: t11.75t \approx 11.75

More problems from Compound interest