You deposit $40,000 into an account with interest compounded annually. You check 12 years after the account opened, and the balance is $87,594. Assuming you never withdraw or deposit money, how many years after the account opened will it have $170,000?
What is the formula to figure this out? I can't find it in my notes anywhere. Thanks.
What is the formula to figure this out? I can't find it in my notes anywhere. Thanks.
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A = P(1 + R/100)^N
87594 = 40000(1 + R/100)^12
87594/40000 = (1 + R/100)^12
(1 + R/100)^12 = 2.18985
(1 + R/100) = (2.18985)^1/12
(1 + R/100) = 1.06749995
R/100 = 0.0675
R = 6.75%
Let after N years it is 170000
170000 = 40000(1 + 6.75/100)^N
170000/40000 = (1.0675)^N
(1.0675)^N = 4.25
N log 1.0675 = Log 4.25
N = Log 4.25/Log 1.0675
= 0.6284/0.02837
= 22.15 years
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87594 = 40000(1 + R/100)^12
87594/40000 = (1 + R/100)^12
(1 + R/100)^12 = 2.18985
(1 + R/100) = (2.18985)^1/12
(1 + R/100) = 1.06749995
R/100 = 0.0675
R = 6.75%
Let after N years it is 170000
170000 = 40000(1 + 6.75/100)^N
170000/40000 = (1.0675)^N
(1.0675)^N = 4.25
N log 1.0675 = Log 4.25
N = Log 4.25/Log 1.0675
= 0.6284/0.02837
= 22.15 years
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first, this is not calculus {maybe you meant Calculate.}
second, it is not continuous growth. {that uses Euler's number.}
second, it is not continuous growth. {that uses Euler's number.}
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solve for i 87594/40000 = (1+i)^12
given i is known, solve for n 170000/40000 = (1+i)^n
given i is known, solve for n 170000/40000 = (1+i)^n