Alissa Fong

MA, Stanford University
Teaching in the San Francisco Bay Area

Alissa is currently a teacher in the San Francisco Bay Area and Brightstorm users love her clear, concise explanations of tough concepts

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Compound Interest (Continuously) - Problem 7

Alissa Fong
Alissa Fong

MA, Stanford University
Teaching in the San Francisco Bay Area

Alissa is currently a teacher in the San Francisco Bay Area and Brightstorm users love her clear, concise explanations of tough concepts

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This problem looks at what interest rate you need in order to get a certain amount of money to double in a certain amount of time in a continuously compounded account. The word "continuous" tells you that you're using "e" as your base, so in order to solve for the rate that is in the exponent, you'll be using the natural log. This example can be applied to any amount of initial investment- all we need to know is that the money is to double. If you get stuck, try writing the equation in log form instead of exponential form.

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