SOLUTION: If Kevin invests $50,000 into an account that earns 6.15% interest compounded monthly, how long will it take his money to double? (round to one decimal place) A.135.6 years B.1

Click here to see ALL problems on Money Word Problems

Question 1170821: If Kevin invests $50,000 into an account that earns 6.15% interest compounded monthly, how long will it take his money to double? (round to one decimal place)
A.135.6 years
B.11.6 years
C.11.3 years
D.9 years
Found 2 solutions by Boreal, ikleyn:
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website!
Rule of 70 would exclude a and d. 70/6.15=11.38 favoring c
P=Po(1+(0.0615/12)^nt
2=(1.005125)^nt
ln2=nt ln 1.005125
nt=135.6 compounding times
divide by 12 to get years , which is 11.3
C

Answer by ikleyn(52866)   (Show Source):
You can put this solution on YOUR website!
.

In such problems, the quantum of the time is   a MONTH.

Therefore, would the problem be formulated ACCURATELY by its composer,
it should ask about the MONTHS --- not about the decimal parts of the year.

DIAGNOSIS:   The problem formulation is   lame.

/\/\/\/\/\/\/\/

For the composer's info :

A year is 12 months - - - not 10 months.

One more notice specially related to the solution by @Boreal :

nt=135.6 compounding times CAN NOT be non-integer value. It is NECESSARY an INTEGER. It MUST be an integer.

So, the correct answer in this case is nt = 136 compounding times,
which is 136 months divided by 12 months = 11 years and 4 months.

        *******************************************
            DO NOT ACCEPT any different answer.
        *******************************************