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Question 915974: if an investment of $
p earns interest at an annual rate r,and the interest is compounded n times a year ,then the amount in the account after t years is given by A=p(1+r/n)^nt. if 1000 is placed in the account with an annual rate of 6%.find how long it will take the money to double when interest is compounded annually
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! if an investment of $p earns interest at an annual rate r,and the interest is compounded n times a year ,then the amount in the account after t years is given by A=p(1+r/n)^nt. if 1000 is placed in the account with an annual rate of 6%.find how long it will take the money to double when interest is compounded annually
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For given problem:
number of compounding periods,n=1
amt of money ($1000) in account not required for solving problem
..
A=p(1+r/n)^nt
A/p=(1+r/n)^nt
2=(1+r)^t
(1+r)^t=2
(1+.06)^t=2
1.06^t=2
take log of both sides
t*ln(1.06)=ln(2)
t=ln(2)/ln(1.06)
t=12(rounded)
how long will it take for the money to double? 12 yrs
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