SOLUTION: how long will it take $500 to double it it is invested at 12% compounded quarterly?
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Question 372469: how long will it take $500 to double it it is invested at 12% compounded quarterly?
Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!
Start with the compound interest formula
Plug in (double the initial investment of $500), , (the decimal equivalent of 12%), and .
Evaluate to get
Add to to get
Divide both sides by .
Evaluate to get .
Take the natural log of both sides.
Pull down the exponent using the identity .
Divide both sides by .
Evaluate the natural log of to get .
Evaluate the natural log of to get .
Divide.
Divide both sides by 4 to isolate "t".
Divide.
Rearrange the equation.
Round to the nearest whole number (ie to the nearest whole year).
So it will take about 6 years for the investment to double.
If you need more help, email me at jim_thompson5910@hotmail.com
Also, feel free to check out my tutoring website
Jim
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