Perfect!Thank you
ln(2) = n ln(1 + 0.06)
n = ln(2) / ln(1.06)
n = 12
[MATH]2P=P(1+0.06)^2[/MATH]The question:
Use the compound interest formula to find n to the nearest larger integer value.
Given:
A = 2P; i = 0.06; n = ?
My work:
A = P(1 + i)n
2P = P(1 + 0.06)n
2 = (1 + 0.06)n
How do I solve for n in this case?
So you are saying that if you deposit money into an account that gets compounded twice that the money will double? Wow. Beside, if n~12 why are you replacing n with 2?
That's the problem that OP wrote.So you are saying that if you deposit money into an account that gets compounded twice that the money will double? Wow. Beside, if n~12 why are you replacing n with 2?
You can't figure out n until you know how long it will take to double?
Think about it. I deposit $1000 at 8% interest. I ask you how many times does the interest need to be compounded per year in order to have $2,000. You need to know how long I am willing to wait before you can answer that.
You're assuming monthly compounding. Where were we told that?You solved your equation correctly by getting n = ln(2)/ln(1.06) ~ 12 NOT 12.
The problem is that you did not use the correct formula.
Is P ( 1+ .06/12)12*1= 2P. The answer is no.
I actually did not assume monthly compounding. I was just using the 12 that the OP found for n.You're assuming monthly compounding. Where were we told that?
I'm assuming the problem is exactly as given.
@frctl, please show us the actual problem, if you didn't.
This is the problem, there is no t in this one
You said yourself that 12 was incorrect.I actually did not assume monthly compounding. I was just using the 12 that the OP found for n.
Dr Peterson, why would we not have to use the compound interest formula? If somehow the OP did, then how can that be. Isn't it true to know how many time the funds needs to be compounded depend on the number of years it is to take to double. What am I missing?You're assuming monthly compounding. Where were we told that?
I'm assuming the problem is exactly as given.
@frctl, please show us the actual problem, if you didn't.
Where is a t in the original post?Then why is there a "t" in the original post!?
Yes, I did say that n~12 is not correct. I said Is P ( 1+ .06/12)12*1= 2P? The answer is no. I tried using n=12 as the OP stated is the answer. I may be wrong but I never said that 12 was the answer.You said yourself that 12 was incorrect.