Example Solving Compound Interest Word Problems : Find time to double.
See Other Compound Interest Word Problem Examples solved by the Algebra Word Problem Solver.| If you invest $1000 in a savings account at 6% nominal annual interest compounded monthly, how long will it take to double? |
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Let A = Final Amount Let P = Principle Let r = Rate Let t = Time Let n = Interest periods per year Given: P = $1000 Given: r = 6% Given: n = 12 A = 2 * P = 2 * 1000 = $ 2000.00 Principles Doubles nt
A = P(1+r/n)
12t
2000 = 1000(1+0.06/12)
12t
2 = (1.005)
12t
Ln(2) = Ln(1.005)
Ln(2) = 12tLn(1.005)
t = (Ln(2)/(12*Ln(1.005)))t = 11.58 years t = 11.58 years |