document.write( "Question 206755: Can someone help me with this word problem please..
\n" ); document.write( "Using the compound interest formula A + P(1 + i)^(n), where P is the original value of an investment, I is the interest rate per compounding period, n is the total number of compounding periods, and A is the value of the investment after n periods. \r
\n" ); document.write( "\n" ); document.write( "To save for college tuition, the parents of a preschooler invest $5000 in a bond fun that earns 6% annual interest compounded monthly. In approximately how many years will the investment be worth $15000?
\n" ); document.write( "Thank you! \n" ); document.write( "

Algebra.Com's Answer #156272 by stanbon(75887) $\"\"$ $\"About$

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To save for college tuition, the parents of a preschooler invest $5000 in a bond fun that earns 6% annual interest compounded monthly. In approximately how many years will the investment be worth $15000?
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\n" ); document.write( "Correct Formula: A(t) = P(1+(r/n))^(nt)
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\n" ); document.write( "15000 = 5000*(1+(0.06/12))^(12t)
\n" ); document.write( "3 = (1+ 0.005)^(12t)
\n" ); document.write( "Take the log of both sides to get:
\n" ); document.write( "12t*log(1.005) = log(3)
\n" ); document.write( "12t = [log(3)]/[log(1.005)]
\n" ); document.write( "12t = 220.2713
\n" ); document.write( "t = 18.36 years
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\n" ); document.write( "Cheers,
\n" ); document.write( "Stan H. \n" ); document.write( "

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