SOLUTION: Assume that a savings account earns interest at the rate of 2% compounded monthly . If this account contains $1000 now, how many months will it take for this amount to double if no
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Question 725039: Assume that a savings account earns interest at the rate of 2% compounded monthly . If this account contains $1000 now, how many months will it take for this amount to double if no withdrawals are made?
Answer by josgarithmetic(39617) (Show Source): You can put this solution on YOUR website!
The interest rates are usually given for year-periods. The 2% interest rate for the year is 2/12 % per month, or 0.1667% per month or 0.001667 as decimal fraction (given to four significant figures, since 1/6 is a repeating decimal).
The compounding is monthly, as given in your description.
Balance is , where is count of months.
When will the original deposited principle double? How many months?
Next, you can choose either base 10 or Natural for taking logarithms of both side. I will use base 10:
months, almost 35 years.
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