Solve.
-Assume the cost of a car is $17,000. With continuous compounding in effect,find the number of years it would take to double the cost of the car at an annual inflation rate of 7.9%. Round the answer to the nearest hundredth.
A) 132.08
B) 123.30
C) 1.23
D) 8.77

Question

Quizplus · Accepted Answer

To find the number of years it takes for an investment to double with continuous compounding, you can use the formula $t = \frac{\ln(2)}{r}$, where $t$ is the time in years and $r$ is the annual interest rate (inflation rate in this case) expressed as a decimal. For an inflation rate of 7.9%, $r = 0.079$. Plugging the values into the formula gives $t = \frac{\ln(2)}{0.079} \approx 8.77$ years.

Solve. -Assume the Cost of a Car Is $17,000. with Continuous