SOLUTION: how many years will it take $2000 invested at 6% to earn $360?

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Question 273661: how many years will it take $2000 invested at 6% to earn $360?
Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website!
future value is 2000 + 360 = 2360

equation is 2000 * 1.06^x = 2360

divide both sides of this equation by 2000 to get:

1.06^x = 2360/2000 = 1.18

take the log of both sides of this equation to get:

log(1.06^x) = log(1.18)

log(1.06^x) = x * log(1.06) so your equation becomes

x*log(1.06) = log(1.18)

divide both sides of this equation by log(1.06) to get:

x = log(1.18)/log(1.06)

use you calculator to solve for x to get:

x = 2.840527544

plug this value into your equation of:

2000 * 1.06^x = 2360 to get:

2000 * 1.06^(2.840527544) = 2360

use your calculator to solve to get:

2360 = 2360 confirming the value for x is good.

answer to your question is it will take 2.840527544 years for 2000 to earn 360.

this assumes annual compounding.