126k views
2 votes
Macro invested $7,161 into a fund that is expected to grow by 4.84% per year. Howlong will it take the fund to be worth double the amount invested? Round answer tothe nearest whole number.

User Linan
by
8.2k points

1 Answer

4 votes

Given:


\begin{gathered} P=7,161 \\ r=4.84\% \\ A=2P \end{gathered}

To Determine: How long it will take the fund to be worth double the amount

Solution

The formula for finding the amount for a compound interest is given as


\begin{gathered} A=P(1+r)^t \\ A=Amount \\ P=Principal \\ r=rate \\ t=time \end{gathered}

Substitute the given into the formula


\begin{gathered} 2P=P(1+0.0484)^t \\ 2P=P(1.0484)^t \end{gathered}
\begin{gathered} 1.0484^t=(2P)/(P) \\ 1.0484^t=2 \end{gathered}
\begin{gathered} t* ln(1.0484)=ln(2) \\ t=(ln(2))/(ln(1.0484) \\ t=14.66506 \\ t\approx15years \end{gathered}

Hence, the time it will the investment to be doubled is 15 years

User Nikunj Peerbits
by
8.1k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.