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Math Help - Solving Exponential Problem

  1. #1
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    Solving Exponential Problem

    Avery invests $2000 in saving certificates at an interest rate of 12% per year compounded quarterly. How long will it take for this sum to double?

    A = P(1 + i)^n

    4000 = 2000((1 + 0.12) / 4)^4n

    2 = 0.28^4n

    log2 = 4nlog0.28

    log2 / log0.28 = 4n

    -0.5445 = 4n

    -0.13612 = n

    Now a year can't be negative so something fishy is going on here.
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  2. #2
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    Quote Originally Posted by Devi09 View Post
    Avery invests $2000 in saving certificates at an interest rate of 12% per year compounded quarterly. How long will it take for this sum to double?
    A = P(1 + i)^n
    4000 = 2000((1 + 0.12) / 4)^4n
    It been years & years since I taught this.
    But you have some elements of the formula wrong.
    It should be P\left( {1 + \frac{r}{n}} \right)^{nt} where r is the annual rate; n is the number of pay periods per year; and t is the number of years.

    So solve this 2 = \left( {1.03} \right)^{4t} .
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  3. #3
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    Yeh I see now. I divided 1 + r by n instead of just the r. Now I get the number I'm suppose to be getting
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  4. #4
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    Just remember that if a^p = x, then p = log(x) / log(a)
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