when dealing with continuously compounded question, how do you know when to use the e function and when to use the ln(S1/S2) formula? An example would be a question such as the below:
An investor invested $10,000 into an account five years ago. Today, the account value is $18,682. What is the investor’s annual rate of return on a continuously compounded basis?
If you’re trying to solve for the interest rate or the investment period, you’ll get an expression using ln(St/S0); if you’re trying to solve for St or S0, then you’ll have some expression using e.