How long will it take to earn $7000 on a $3500 investment at a rate of 7.8% compounding continuously?

1 Answer
Jun 12, 2016

#n = 9.229# years

Explanation:

As it does not state what the period of compounding refers to, I will assume it is per year.

For Compound Interest"
#Amount = P(1 + r)^n#, where #n# is the time in years.

#7000 = 3500(1 + 0.078)^n#

#2 = (1.078)^n " divide by 3500"#

Because #n# is an exponent, we need to use logs.

#log2 = n log1.078" power law as well"#

#log2/log1.078# = #n#

#n = 9.229 years " calculator"#