Answer:
(a) t = 15.40 years
(b) t = 24.41 years
Step-by-step explanation:
The expression that describes continuous compounding is:
[tex]FV = P*e^{rt}[/tex]
The principal (P) is $3,000 invested at a rate r=0.045.
a) The time required for the amount to double (FV =$6,000) is:
[tex]6,000 = 3,000*e^{0.045t}\\0.045t*ln(e)=ln(\frac{6,000}{3,000})\\ t=15.40\ years[/tex]
a) The time required for the amount to triple (FV =$9,000) is:
[tex]9,000 = 3,000*e^{0.045t}\\0.045t*ln(e)=ln(\frac{9,000}{3,000})\\ t=24.41\ years[/tex]
