Find the time required for an investment of 5,000 dollars to grow to 10,000 dollars at an interest rate of 4% per year, compounded monthly. Give your answer accurate to 2 decimal places.

Answer 1

2000=1000(1+.04/n)^nt where n = 12 = number of compounding periods per year. .04 + rate of interest = 4%

$1000 = original principle, $2000 = ending Amount

2 = (1+.04/12)^12t

= (1+1/300)^12t

= 1.00333...)^12t

ln2 with base 1.00333 = 12t

t = ln2/12ln1.00333...

=about 17.37 years to double the investment from $5,000 to $10,000 at 4% compounded monthly

it's also the time to double any amount. 17.37 years = the doubling time