SOLUTION: Mary wants her $9000 GIC to double in value in nine years. What annual rate of interest is required for her to reach her goal. Assume interest is compounded annually.

Question 127467: Mary wants her $9000 GIC to double in value in nine years. What annual rate of interest is required for her to reach her goal. Assume interest is compounded annually.
Answer by ankor@dixie-net.com(22740) (Show Source): You can put this solution on YOUR website!
Mary wants her $9000 GIC to double in value in nine years. What annual rate of interest is required for her to reach her goal. Assume interest is compounded annually.
:
Let r = decimal value of the interest required
:
Using the annual interest equation: A = Ao*(1+r)^t
:
9000 * (1 + r)^9 = 18000
:
(1 + r)^9 = 18000/9000; divided both sides by 9000
:
(1 + r)^9 = 2
:
9 * ln(1+r) = .693
ln(1 + r) =
ln(1 + r) = .077
:
Find the antilog (e^x) of both sides
1 + r = 1.08
;
r = 1.08 - 1
:
r = .08 which is 8%
;
:
Check solution using a calc
1.08^9 * 9000 = 17991 ~ 18000
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