Answer:
12.16 years
Step-by-step explanation:
Continuous Compounding Formula
[tex]\large \text{$ \sf A=Pe^{rt} $}[/tex]
where:
- A = Final amount
- P = Principal amount
- e = Euler's number (constant)
- r = annual interest rate (in decimal form)
- t = time (in years)
Given:
- A = $5,000 (double the initial investment)
- P = $2,500
- r = 0.0570
Substitute the given values into the formula and solve for t:
[tex]\sf \implies 5000=2500e^{0.0570t}[/tex]
[tex]\sf \implies \dfrac{5000}{2500}=\dfrac{2500e^{0.0570t}}{2500}[/tex]
[tex]\sf \implies 2=e^{0.0570t}[/tex]
Take natural logs of both sides:
[tex]\sf \implies \ln 2=\ln e^{0.0570t}[/tex]
[tex]\textsf{Apply the power law}: \quad \ln x^n=n \ln x[/tex]
[tex]\sf \implies \ln 2=0.0570t\ln e[/tex]
As ln e = 1:
[tex]\sf \implies \ln 2=0.0570t[/tex]
[tex]\sf \implies \dfrac{\ln 2}{0.0570}=\dfrac{0.0570t}{0.0570}[/tex]
[tex]\sf \implies t=\dfrac{ \ln 2}{0.0570}[/tex]
[tex]\implies \sf t=12.16047685...[/tex]
Therefore, the time required for the amount to double is 12.16 years (2 d.p.).
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