Question

Find the time required for an investment of 7,000 dollars to grow to 12,000 dollars at an interest rate of 9% per year, compounded monthly. Give your answer accurate to 2 decimal places.

_______ years

Answer 1

below

Explanation:

Period = monthly ( 12 periods per year)

Periodic interest in decimal form = i = .09/12

Periods ( months ) = n

FV = future value = 12000

PV = present Value = 7000

Formula

FV = PV(1+i)^n =

12000=7000(1+.09/12)^n solve for 'n' months

n= 72.14 months = ~6 years