• We will solve this by using the formula:compounded continuously
A = P e ^ rt
where A = 100 000;
P = 100
r = 9.2 %/100 = 0.092
t = ?
• Subtitute into the compounded continuosly formula :
1000 000 = 100 e ^0.092t
1000 000/100 = e ^ 0.092t
10 000= e^0.092 t
Solve for t:
ln 10 000= lne^0.092t
ln 10 000/0.092 = t
t = 100 years
• This means that it will take ,100 years ,to reach the same amount of $1000 000, take note that this is twice the time it took on the steps above, whereby t was 50 years .
