Problem 4. (8 points) How long will it take an investment to double in value if the interest rate is 7% (r = 0.07) compounded continuously? Don't make any approximations or rounding, just write what you have found as a rational number. Answer: years.
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Step 1: Use the continuous compounding formula: \(A = P \times e^{rt}\), where A is the final amount, P is the initial investment, r is the annual interest rate, and t is the time in years. Show more…
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