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17 November, 17:34

g : How long will it take for a $4000 investment to grow to $6000 at an annual rate of 15%, compounded monthly? Assume that no withdrawals are made. Do not round any intermediate computations, and round your answer to the nearest hundredth.

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  1. 17 November, 19:19
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    2.72

    Explanation:

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

    P: Principal amount

    r: interest rate

    n: number of times interest is applied per time period

    t: time period

    6000=4000 (1 + 0.15/12) ^12t

    1.5 = (1.0125) ^12t

    applying log on both sides

    log1.5 = log 1.0125^12t

    log 1.5 = 12t log 1.0125

    12t = 0.03063

    12t = 32.64

    t = 2.72 years
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