The formula t = ln A − ln P r can be used to find the number of years t required for an investment p to grow to a value A when compounded continuously at an annual rate r . b. What annual rate is required to increase the value of a $ 2000 IRA to $ 30,000 in 35 years?
The formula t = ln A − ln P r can be used to find the number of years t required for an investment p to grow to a value A when compounded continuously at an annual rate r . b. What annual rate is required to increase the value of a $ 2000 IRA to $ 30,000 in 35 years?
Solution Summary: The author explains how the formula t = ln A Ln P r can be used to find the number of years required for an investment p to grow to a value A when compounded continuously at
To find: The formula can be used to find the number of years required for an investment to grow to a value
when compounded continuously at an annual rate .
b. What annual rate is required to increase the value of a IRA to in 35 years?
Expert Solution
Answer to Problem 68AYU
Solution:
b.
Explanation of Solution
Given:
The formula can be used to find the number of years required for an investment to grow to a value
when compounded continuously at an annual rate .
Calculation:
b. What annual rate is required to increase the value of a IRA to in 35 years
To determine
To find: The formula can be used to find the number of years required for an investment to grow to a value
when compounded continuously at an annual rate .
c. Give a derivation of this formula.
Expert Solution
Answer to Problem 68AYU
Solution:
c. We know that
Taking ln on both sides we get
Therefore
Explanation of Solution
Given:
The formula can be used to find the number of years required for an investment to grow to a value
when compounded continuously at an annual rate .
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