If you put $2,000 into an interest bearing account, where interest is compounded quarterly (4 times a year) at 6%, how long will it take for your money to triple?
Use A = P(1 + r/n)^nt
Solve for t.
Enter ___ years to one decimal.
1 Answer | Add Yours
P(principal) = 2000; r(rate) = 6% or 0.06; n(#of times compounded per year) = 4; A = amount after applying rate and time = $6000 (2000 tripled) and t = amount of time = what we are trying to find.
`6000 = 2000(1 +(.06)/(4))^(4t)` ; divide each side by 2000 and simplify parenthesis
`3 = ((203)/(200))^(4t)` ; now take log of each side
`log 3 = log((203)/(200))^(4t)` therefore use power rule
`log 3 = 4t*log((203)/(200))`
divide each side by log(203/200)
73.789 = 4t divide each side by 4
`t = 18.447` one decimal place is: `t = 18.4`
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