continuous compounding

[cbradford0015]

please help me with this problem, I don't know where to start!!

assume the cost of a loaf of bread is now $3. with continuous compounding, find the time it would take for the cost to triple at an annual rate of 5%.

 

[wjm11]

please help me with this problem, I don't know where to start!!

assume the cost of a loaf of bread is now $3. with continuous compounding, find the time it would take for the cost to triple at an annual rate of 5%.

Start with the equation for compound interest: A = P(e^(rt))
A is the amount you end up with. P (principal) is the amount you start with. “e” is the base of the natural logarithm. “r” is the interest rate, expressed as a decimal. “t” is the time of investment duration.

In your problem, P = 3, r = .05, and A = 9. Plug those in and solve for t.