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18 October, 14:36

Thor invests $3000 in an account, with interest compounded continuously. If his investment doubles in value after 7.2 years, what interest rate is he earning? [Use the formla A = Pert and round answer to the nearest tenth.]

A) 8.5%

B) 9.6%

C) 12.3%

D) 14.0%

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  1. 18 October, 18:18
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    B. 9.6 %.

    Step-by-step explanation:

    A = P e^rt

    His investment doubles so it comes to 3000 * 2 = $6000.

    Substituting in the formula>

    6000 = 3000e^7.2r ehere r is the interest rate.

    e^7.2r = 2

    Taking logs

    7.2r = ln 2

    r = ln2 / 7.2

    r = 0.096

    So the rate is 9.6%.
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