Question

You deposit $10,00 into an investment account that results in your money earning 5.2% interest compounded monthly. a) determine the value of the account after 10 years.B) How many years will it take for it to triple.

Answer 1

Part a

We can do the following:

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

For this case we can replace and we have:

`A=10000(1+(0.052)/(12))^(12\cdot10)=16801.39`

Part b

For this case we can do the following:

`30000=10000(1+(0.052)/(12))^(12\cdot t)`

Solving for t we have

`3=(1+(0.052)/(12))^(12t)`
`\ln (3)=12t\ln (1+(0.052)/(12))`
`t=(\ln (3))/(12\cdot\ln (1+(0.052)/(12)))=21.17`

then the answer is 21.1 years