The function D gives the time, in years, that it takes for an investment to double if interest is continuously compounded at r%. Write a sentence of interpretation for
A) At 8% interest compounded continuously, an investment will double its value in 7.2 years.
B) At 8% interest compounded continuously, an investment will triple its value in 7.2 years.
C) At 8% interest the investment will be same after 7.2 years.
D) At 7.2% interest compounded continuously, an investment will double its value in 8 years.
E) At 7.2% interest compounded continuously, an investment will triple its value in 8 years.

Question

The function D gives the time, in years, that it takes for an investment to double if interest is continuously compounded at r%. Write a sentence of interpretation for 
A) At 8% interest compounded continuously, an investment will double its value in 7.2 years. 
B) At 8% interest compounded continuously, an investment will triple its value in 7.2 years. 
C) At 8% interest the investment will be same after 7.2 years. 
D) At 7.2% interest compounded continuously, an investment will double its value in 8 years. 
E) At 7.2% interest compounded continuously, an investment will triple its value in 8 years.

Quizplus · Accepted Answer

The function D gives the time, in years, that it takes for an investment to double if interest is continuously compounded at r%. Therefore, at 8% interest compounded continuously, an investment will double in 7.2 years according to the function D. None of the other answer choices accurately reflect this interpretation.

The Function D Gives the Time, in Years, That It