Question

g : How long will it take for a $4000 investment to grow to $6000 at an annual rate of 15%, compounded monthly? Assume that no withdrawals are made. Do not round any intermediate computations, and round your answer to the nearest hundredth.

Answer 1

Answer:

2.72

Explanation:

A= P(1+r/n)^nt

P: Principal amount

r: interest rate

n: number of times interest is applied per time period

t: time period

6000=4000(1+ 0.15/12)^12t

1.5=(1.0125)^12t

applying log on both sides

log1.5= log 1.0125^12t

log 1.5= 12t log 1.0125

12t= 0.03063

12t= 32.64

t= 2.72 years