SOLUTION: A principal of $5000 is invested at 4% interest rate compounded monthly. Write the formula for the amount in the account after t years, and solve determine how long it will take th

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Question 547356: A principal of $5000 is invested at 4% interest rate compounded monthly. Write the formula for the amount in the account after t years, and solve determine how long it will take the investment to grow to 8000.
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
A principal of $5000 is invested at 4% interest rate compounded monthly. Write the formula for the amount in the account after t years, and solve determine how long it will take the investment to grow to 8000.
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A(t) = P(1+(r/n))^(nt)
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A(t) = 5000(1+(0.04/12))^(12t)
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8000 = 5000(1+(0.04/12))^(12t)
(1.0033)^12t = (8/5)
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Take the log to get:
12t = log(8/5)/log(1.0033)
t = 11.88 years
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Cheers,
Stan H.
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