SOLUTION: Saif is planning to buy a house in 19 years. He wants to invest RO 334 now and hopes to have RO 9334 to spend on the house when he buys it. What kind of interest rate would he need

Question 1169798: Saif is planning to buy a house in 19 years. He wants to invest RO 334 now and hopes to have RO 9334 to spend on the house when he buys it. What kind of interest rate would he need if his investment is compounded monthly?
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
9334=334+(1+(r/12))^228
27.946=(1+(r/12))^228
don't round
ln both sides
3.330=228 ln(1+(r/12))
0.01460=ln(1+(r/12))
raise to e power
1.0147=1+(r/12)
0.0147=r/12
r=17.656%
--
this is doubling more than 4 times, and rule of 72 suggests 4 year doubling time, so this doubles four times and almost a 5th
334*2^4=5344, and one more doubling would be over 9334.
alternatively, ln 27=3.33, so in 19 years needs an interest rate of 333/19 in percent, and that is 17.53%, so answer is reasonable.
RELATED QUESTIONS
Alex expects to graduate in 3.5 years and hopes to buy a new car then. He will need a 20% (answered by ikleyn)

Alex expects to graduate in 3.5 years and hopes to buy a new car then. He will need a 20% (answered by Theo)

RoTo=RbTb+16, Ro+Rb=1, To=1, Tb=-6. Find Ro and Rb. Please help... (answered by MathLover1)

V = C(Ro � R)R^2 where C > 0 is a constant based on individual body characteristics,... (answered by Earlsdon)

What is 5 rounded RO the nearest hundredth al what's 313 and 136 rounded to the nearest... (answered by solver91311)

Charlie wants to buy a $1000 TV in 6 months. How much should he invest now at 3%... (answered by checkley79)

Hello, Sorry if this has the wrong topic, I wasn't sure which one to choose, the question (answered by Fombitz)

in 54 months, Bill wants to build a $20,000 three-season room addition on his house. How... (answered by jorel1380)

Willie owns and manages a number of real-estate rental properties in town and enjoys... (answered by solver91311)