SOLUTION: How long will it take ​$4,000 to grow to ​$23,000 if it is invested at ​7% compounded​ monthly? Homework question from Hans Beauvoir

Algebra ->  Finance -> SOLUTION: How long will it take ​$4,000 to grow to ​$23,000 if it is invested at ​7% compounded​ monthly? Homework question from Hans Beauvoir      Log On


   

Question 1177041: How long will it take ​$4,000 to grow to ​$23,000 if it is invested at ​7% compounded​ monthly?


Homework question from Hans Beauvoir
Answer by ankor@dixie-net.com(22740) About Me  (Show Source):
You can put this solution on YOUR website!
How long will it take ​$4,000 to grow to ​$23,000 if it is invested at ​7% compounded​ monthly?
:
The compound interest formula: A+=+P%281%2B%28r%2Fn%29%29%5E%28nt%29, where
A = resulting amt after t time (23000)
P = initial amt (4000)
r = annual interest rate in decimal form (.07)
n = no. of compounding period per yr (12)
t = no. yrs
:
4000%281%2B%28.07%2F12%29%29%5E%2812t%29+=+23000
%281.005833%29%5E%2812t%29+=+23000%2F4000
%281.005833%29%5E%2812t%29+=+5.75
using logs
12t*log(1.005833) = log(5.76)
12t = log%285.76%29%2Flog%281.005833%29
12t = 301
t = 301%2F12
t ~ 25 yrs 1 month