SOLUTION: the rate of interest for $2,000 invested for 10 years to accumulate to $3,000 if it is compounded monthly...using the formula a= p(1+r/n)^(nt)

Algebra ->  Logarithm Solvers, Trainers and Word Problems -> SOLUTION: the rate of interest for $2,000 invested for 10 years to accumulate to $3,000 if it is compounded monthly...using the formula a= p(1+r/n)^(nt)      Log On


   

Question 706998: the rate of interest for $2,000 invested for 10 years to accumulate to $3,000 if it is compounded monthly...using the formula a= p(1+r/n)^(nt)
Answer by josgarithmetic(39625) About Me  (Show Source):
You can put this solution on YOUR website!
The information from the description is this:
p=2000
r=unknown
a=3000
n=12 (because the year is cut into 12 equal parts, meaning "monthly")
t=10

Keep all as symbols, solve for r, AND THEN substitute the values.
As I OMIT most of the symbolic steps, the equation you will have is
log%2810%2C%281%2Br%2Fn%29%29=%28log%2810%2Ca%29-log%2810%2Cp%29%29%2F%28nt%29
(start by taking logarithm of both sides...).
... I am here referring to log base TEN (but you could choose whatever base you like).

Do not be hung-up with the (1+r/n) number. It just represents the monthly interest rate. Just solve for (1+r/n), and when you have this value, you can then proceed to find r, the yearly rate, because you already know n.