SOLUTION: assume that you place money in an account that is compounded annually. how long will it take the investment to increase by 60% at an interest rate of 5%

Question 877147: assume that you place money in an account that is compounded annually. how long will it take the investment to increase by 60% at an interest rate of 5%
Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
assume that you place money in an account that is compounded annually. how long will it take the investment to increase by 60% at an interest rate of 5%
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Compound Interest Formula: A=P(1-i)^n, P=initial investment, i=interest per period, n=number of periods, A=amount after n-periods
For given problem:
i=5%
A/P=1.6=(1+i)^n
1.6=(1+.05)^n
take log of both sides:
log(1.6)=nlog(1.05)
n=log(1.6)/log(1.05)
n≈9.6 yrs
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