SOLUTION: M wishes to determine how long it will take an initial deposit of $10,000 to double. a)How long will it take if he earns only 7% annual interest? Reviewing your findings in par

Algebra ->  Finance -> SOLUTION: M wishes to determine how long it will take an initial deposit of $10,000 to double. a)How long will it take if he earns only 7% annual interest? Reviewing your findings in par      Log On


   

Question 1202269: M wishes to determine how long it will take an initial deposit of $10,000 to double.
a)How long will it take if he earns only 7% annual interest?
Reviewing your findings in parts a and b, indicate what relationship exists between the interest rate and the amount of time it will take M to double his money.
Answer by mananth(16946) About Me  (Show Source):
You can put this solution on YOUR website!
r
r = 7/100
r = 0.07 per year,
P= 10000
Thecompound interest formula
n=?


A = P(1 + r/n)^nt
t = ln(A/P) / n[ln(1 + r/n)]
plug in the data and simplify
t = ln(20000/10000)) / ( 1 * (ln(1 + 0.07)) )

t = ln(20,000.00/10,000.00) / ( 1 × [ln(1 + 0.07)] )
t = 10.245 years
Round off as required