Compound InterestDate: 04/11/97 at 19:47:10 From: charles Subject: Compound Interest How many years (to the nearest tenth) will be needed for $5000 to increase to $22,000 at 11 percent interest compounded monthly? Date: 04/13/97 at 08:00:33 From: Doctor Anthony Subject: Re: Compound Interest The monthly interest rate is 11/12 = 0.91666. Use the formula A = P(1 + r/100)^n where A = amount = 22,000, P = principal = 5000, r = interest rate/month = 0.91666, and n = number of months. 22000 = 5000(1.0091666)^n. So 1.009166^n = 22/5 = 4.4 Now take the natural logs, so n*ln(1.0091666) = ln(4.4) n = ln(4.4)/ln(1.0091666) = 162.37 months = 13.53 years = 13 years 6 months. -Doctor Anthony, The Math Forum Check out our web site! http://mathforum.org/dr.math/ |
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