Question 565397: Every £1 of money invested in a savings scheme continuously gains interest at a rate of 4% per year. Hence, after x years, the total value of an initial£1 investment is £y, where y = 1.04^x.
(a) Calculate, to the nearest £, the total value of an initial £800 investment after 10 years ?
(b) Use logarithms to find the number of years it takes to double the total value of any initial investment ?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Every £1 of money invested in a savings scheme continuously gains interest at a rate of 4% per year. Hence, after x years, the total value of an initial£1 investment is £y, where y = 1.04^x.
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(a) Calculate, to the nearest £, the total value of an initial £800 investment after 10 years ?
A(10) = 800*1.04^10 = $1184.20
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(b) Use logarithms to find the number of years it takes to double the total value of any initial investment ?
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Solve: 2 = 1*1.04^x
1.04^x = 2
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x(log(1.04) = log(2)
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x = log(2)/log(1.04)
x = 17.67 years
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Cheers,
Stan H.
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