Question

# 24 At a growth (interest) rate of 9 percent annually, how long will it take for...

24

At a growth (interest) rate of 9 percent annually, how long will it take for a sum to double? To triple? Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

#### Homework Answers

Answer #1

a.We use the formula:
A=P(1+r/100)^n
where
A=future value(\$2x)
P=present value(\$x say)
r=rate of interest
n=time period.

2x=x*(1.09)^n

2=(1.09)^n

Taking log on both sides;

log 2=n*log (1.09)

n=log 2/log (1.09)

=8.04 years(Approx).

b.We use the formula:
A=P(1+r/100)^n
where
A=future value(\$3x)
P=present value(\$x say)
r=rate of interest
n=time period.

3x=x*(1.09)^n

3=(1.09)^n

Taking log on both sides;

log 3=n*log (1.09)

n=log 3/log (1.09)

=12.75 years(Approx).

Know the answer?
Your Answer:

#### Post as a guest

Your Name:

What's your source?

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Not the answer you're looking for?
Ask your own homework help question