Respuesta :
Answer: Approximately 6.3876 years
When rounding to the nearest whole number, this rounds up to 7 years.
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Work Shown:
We'll use the compound interest formula
A = P*(1+r/n)^(n*t)
where,
- A = amount of money after t years
- P = initial deposit amount or principal
- r = interest rate in decimal form
- n = compounding frequency
- t = number of years
In this case, we know that,
- A = 2P, since we want the initial amount to double. P can be any positive real number you want and it doesn't affect the answer.
- r = 0.11
- n = 4, since we're compounding 4 times a year
- t = unknown, what we want to solve for
So,
A = P*(1+r/n)^(n*t)
2P = P*(1+r/n)^(n*t)
2 = (1+r/n)^(n*t)
2 = (1+0.11/4)^(4*t)
2 = 1.0275^(4t)
Ln(2) = Ln(1.0275^(4t))
Ln(2) = 4t*Ln(1.0275)
4t*Ln(1.0275) = Ln(2)
t = Ln(2)/(4*Ln(1.0275))
t = 6.38758965414661
It takes roughly 6.3876 years for the deposit to double. If you need this to the nearest whole number, then round up to 7. We don't round to 6 because then we would come up short of the goal of doubling the deposit.
