The discussion revolves around determining the interest rate required for a bank deposit to double in value over a period of 8 years, specifically under continuous compounding conditions.
Some participants have acknowledged reminders about unit considerations, indicating a level of engagement with the problem. There is a mention of a heuristic approach to check the reasonableness of the calculated rate, but no consensus has been reached on the correct method or final answer.
Participants are navigating through the implications of continuous compounding and the accuracy of approximations in financial calculations. There is a reference to a common rule of thumb regarding doubling time, which may not directly apply to the specific problem at hand.
Math10 said:Homework Statement
At what rate of interest, compounded continuously, will a bank deposit double in value in 8 years?
Homework Equations
None.
The Attempt at a Solution
Q0e8r=2Q0
e8r=2
8r=ln(2)
r=ln(2)/8
But the answer is (25/2)ln(2)%. How do I get the answer from there?