Problema Solution
Determine the time necessary for $5100 to double if it is invested at interest rate r=11& compound as follow
Answer provided by our tutors
P = $5100 the principal value
r = 0.11 or 11% annual rate
t = the time needed for amount to double in years
A = 2P future value
A = P(1 + r)^t
P(1 + r)^t = 2P divide both sides by P
(1 + r)^t = 2
plug the value for r = 0.11
(1 + 0.11)^t = 2
1.11^t = 2
t ln(1.11) = ln(2)
t = ln(2)/ln(1.11)
t = 6.64 years
6.64 years are necessary for the amount to double.