00:01
Given the information that stock was bought for $20 ,000 five years ago, and that it just sold for $30 ,000 with interest compounded continuously, what was the interest rate that it was at? so with the key information that this stock is compounded continuously, we know what formula we're going to need to use, and that's a is equal to p -e -r -t.
00:24
So now we can just start to fill in the information that we were given.
00:27
So we see that it just sold for $30 ,000.
00:31
So that is the value or a.
00:35
This is what the stock is worth today.
00:37
Our principal is what it was initially purchased for, which is this $20 ,000 times e.
00:45
And our rate, that's what we're trying to find.
00:47
So it's going to be our variable of interest times our time, which we were told was five years...