SOLUTION: Find the doubling time for an investment into an account bearing 8.6% interest, compounded monthly.

Question 920740: Find the doubling time for an investment into an account bearing 8.6% interest, compounded monthly.
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
f = p * (1+i)^n

f is the future value
p is the present value
i is interest rate per time period
n is the number of time periods.

in this problem:

set f = 2 and p = 1
this means that the future value will be double the present value.

set i = 8.6 / 100 / 12 = .086 / 12 = .07166666...

add 1 to that to get 1.0716666...

best to store it in your calculator so you can work with the full number stored there until you're done, at which time you can round as required.

n is what you are trying to solve for.

your equation becomes:

2 = 1 * (1.0716666...)^n

simplify to get:

2 = (1.0716666...)^n

take the log of both sides of this equation to get:

log(2) = log((1.0716666...)^n)

since log((1.0716666...)^n) = n * log(1.0716666...), your equation becomes:

log(2) = n * log(1.0716666...)

divide both sides of this equation by log (1.0716666...) to get:

log(2) / log(1.0716666...) = n

solve for n to get:

n = 97.06437234

your money will double in 97.06437234 months.

divide that by 12 to make it equivalent to 8.088697695 years

round as you require.

RELATED QUESTIONS
Question 1. How long will it take for an investment to double at 7%p.a. compounded... (answered by Boreal)

Find the time required for an investment to triple in value if invested in an account... (answered by greenestamps,ikleyn)

The formula A = 𝑃 (1 +𝑟𝑛)𝑛𝑡 is used to determine (answered by Alan3354)

Jimmy invest Rm 15,000 in an account for six years. The investment account pays 8%... (answered by Boreal)

find the amount of annuity that consists of 24 monthly payments of $500 each into an... (answered by ikleyn)

Jimmy invest Rm 15,000 in an account for six years. The investment account pays 8%... (answered by addingup,MathTherapy)

Find the doubling time of an investment earning 7% interest if interest is compounded... (answered by ewatrrr)

Doubling time of an investment earning 2.5 interest if interest is compounded... (answered by lwsshak3)

1)Find the time required for an investment of 7,000 dollars to grow to 11,000 dollars at... (answered by Theo)