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Mike
Lv 4
Mike asked in Science & MathematicsMathematics · 1 decade ago

Algebra 2 question - solving ?

When P dollars are invested at interest rate "I", compounded monthly, for t years, the investment grows to A dollars where A = P (1 + i/12)^12t. Find the time it takes $10,000 to grow to $15,000 at 4% annually.

I know that...

10,000 (1 + 0.04/12) ^ 12t = 15,000.

But how do I solve from here?

I know the answer is 10.15 years, but I just don't know how to get there.

1 Answer

Relevance
  • Anonymous
    1 decade ago
    Favorite Answer

    10,000 (1 + 0.04/12) ^ 12t = 15,000

    (1 + 0.04/12) ^ 12t = 15000 / 10000

    = 1.5

    Taking logs:

    12t log(1 + 0.04 / 12) = log(1.5)

    t = log(1.5) / [ 12 log(1 + 0.04 / 12) ]

    = 10.15 yr.

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