SOLUTION: How many years, correct to the nearest tenth of a year, will it take for a sum of money to double if it's invested at 9.5%, compounded quarterly?
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Question 952802: How many years, correct to the nearest tenth of a year, will it take for a sum of money to double if it's invested at 9.5%, compounded quarterly?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
How many years, correct to the nearest tenth of a year, will it take for a sum of money to double if it's invested at 9.5%, compounded quarterly?
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A(t) = P(1+(r/n))^(nt)
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Comment::
Notice that (1+(r/n))^(nt) is the multiplier.
When that multiplier equal "2" your money has doubled.
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Solve::
(1 + (0.095/4))^(4t) = 2
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(1.02375)^(4t) = 2
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Since the variable is in the exponent, take the log to get:
(4t)*log (1.02375) = log(2)
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4t = log(2)/log(1.02375) = 29.53
time = 29.53/4 = 7.38 years
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Cheers,
Stan H.
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