Question 1188726: How long will it take Php 2000 to earn Php 500 if the interest is 12% compound monthly Found 2 solutions by Theo, ikleyn:Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website! the interest is 12% compounded monthly.
diviee that by 12 to get an interest of 1% per month.
divide that by 100 and add 1 to it to get a growth rate of 1.01 per month.
to earn an interest of 500, the 2000 must grow to 2500.
your equation is 2500 = 2000 * 1.01 ^ n
n is the number of months.
divide both sides of that equation by 2000 to get:
2500 / 2000 = 1.01 ^ n
simplify to get:
5/4 = 1.01 ^ n
take the log of both sides of the equation to get:
log(5/4) = log(1.01 ^ n) which becomes:
log(5/4) = n * log(1.01)
divide both sides of that equation by log(1.01) to get:
log(5/4) / log(1.01) = n
solve for n to get:
n = 22.42574188
it will take 22.42574188 months to earn 500 interest on the account.
2000 * 1.01 ^ 22.42574188 = 2500
2500 - 2000 = 500 interest.
