SOLUTION: Approximately how long will it take $1000 to grow to $5006 at 8% annual interest, compounded 12 times per year?
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-> SOLUTION: Approximately how long will it take $1000 to grow to $5006 at 8% annual interest, compounded 12 times per year?
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:
Use the compound interest formula: A = Ao*(1+r/n)^tn
where
A = resulting amt after t yrs
Ao = initial amt (principal)
r = interest rate in decimal form
n = no. of time compounded per year
t = no. of years
:
In this problem we want to find t
1000*(1+.08/12)^12t = 5006
:
(1.0067)^12t =
(1.0067)^12t = 5.006
log(1.0067^12t) = log(5.006)
12t*log(1.0067) = log(5.006)
12t =
12t = 241.2
t =
t ~ 20 years
