(Round up to the next year.)
a. How many years does it take for 1 to become 3 at $5\%$ interest compounded continuously?
b. How many years does it take for $\$1,000,000$ to become $\$3,000,000$ at $5\%$ interest compounded continuously?
Can someone please walk me through/help me solve this? I'm in 8th grade, Algebra 1. Middle school.
I would appreciate If you just gave me the formula and explained how it works.
One dollar, compounded continuously with an annual interest rate $r$, will become $e^{rt}$ dollars after $t$ years. Therefore, you need to solve the equation $$e^{rt}=3$$ and the solution is about $t=21.9$ years.