Story Question about MONEY

$3500 is invested at an annual rate of 5.3%, compounded six times each year
(bi-monthly). How many months will it take for the account to double in value?


If someone could explain this step by step that would be great so I can apply it to my other homework problems, that would be great.

Thanks,
DJ

Just plug it into the compound-interest formula they gave you:

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

...and simplify to get the answer.

Eliz.

stapel said:

Just plug it into the compound-interest formula they gave you:

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

...and simplify to get the answer.

Eliz.

Click to expand...

so would it be:

3500(1 + 5.3/6)⁶

Math wiz ya rite 09 said:

so would it be:

3500(1 + 5.3/6)⁶

Click to expand...

You should have an equation, not just an expression. The equation should include the ending value (given in the exercise).

Also, they should have mentioned in class that percentages are ALWAYS converted to decimal form before doing anything mathematical with them. So naturally "r" should not be replaced with "5.3%", but rather with the decimal form.

I'm not sure why you're assuming "nt" to be equal to 6...? Especially since you're supposed to be solving for "t", rather than just assuming it to be equal to 1.

Eliz.

so then


3500(1+0.053/6)^6t = 7000
(1+0.053/6)^6t = 2
(6053/6000)^6t = 2
t=13.13


is this rite process??

would I have to round up to 14 months since it componds at the 14th month and not in the time between month to month?

Math wiz ya rite 09 said:

would I have to round up to 14 months since it componds at the 14th month and not in the time between month to month?

Click to expand...

13.13 is correct, BUT is 13.13 YEARS, not months.
So 13.13 * 12 = 157.56 months.
Rounding that to 158 months is really up to you...what does your teacher prefer?
Play safe, quote both:" ~157.56 months, or 158 rounded up"