Math

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If $8,500 is invested at 6% compounded continuously, how long will it take to double the investment?

  • Math -

    Continuous compounding:
    future value = present value * ert
    where t=number of periods, and r=rate

    future value/present value = 2
    or
    ert=2
    e0.06t=2
    take natural log on both sides,
    0.06t = ln(2)
    t=11.55 years.

    The rule of 69
    ==============
    In fact, you can apply the rule of 69 for continuous compounding:
    the time (in years) to double is 69.31 divided by the annual rate in %.

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