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

question 39

Multiple Choice

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) If the interest rate for an investment at 4% compounded continuously is changed to 5% compounded continuously, the doubling time will decrease by approximately 2.74 years.
• B) If the interest rate for an investment at 4% compounded continuously the doubling time will decrease by approximately 2.74 years.
• C) If the interest rate for an investment at 2.74% compounded continuously the doubling time will decrease by approximately 4 years.
• D) If the interest rate for an investment at 4% compounded continuously is changed to 5% compounded continuously, the doubling time will increase by approximately 2.74 years.
• E) If the interest rate for an investment at 2.74% compounded continuously is changed to 3.74% compounded continuously, the doubling time will increase by approximately 4 years.

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