Question 598450: How many years will it take a savings bond to double in value if interest is compounded monthly at an annual rate of 4%?
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! How many years will it take a savings bond to double in value if interest is compounded monthly at an annual rate of 4%?
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compound interest formula:
A=P(1+r)^t, P=initial investment, r=interest rate per period, t=number of periods, A=amount after t periods.
..
For given problem:
A/P=2
r=.04/12=.0033
t=number of months
..
A=P(1+r)^t
A/P=(1+.0033)^t
2=(1.0033)^t
take log of both sides
log(2)=t*log(1.0033)
log(2)/log(1.0033)=t
using log key on calculator
t≈208 months or 17 years
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