Math Problem Statement

A family paid $99,000 cash for a house. Fifteen years later, the house was sold for $195,000.

If interest is compounded continuously, what annual nominal rate of interest did the original

$99,000 investment earn?

Solution

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Math Problem Analysis

Mathematical Concepts

Exponential Growth
Continuous Compounding
Logarithms

Formulas

A = P * e^(rt) (Continuous Compounding Formula)
r = (ln(A/P)) / t

Theorems

Exponential Growth Theorem

Suitable Grade Level

Grades 10-12