The 1st amount gets multiplied by 1.007 each month and the 2nd amount by 1.095 each year.
Hello, here is my problem:
Alex invests $50,000 at an interest rate of 0.7% compounded monthly. Laura invests $40,000 at 9.5% compounded annually. After how many years will the two investments be equal in value?
okay so this is what I have so far
50,000 x (.07x12)^n=x
40,000 x .095^n=x
I am not really sure how to set up the equation and I'm pretty sure I started off wrong, help is much appreciated!
Thank you!
Dan
The reason i cant figure it out is because it has two variables. In the answers n= 10.6, but if you sub that in the x variable in each equation are different when they should be the same according to the question in the first post. I am clearly missing something...
No "7% compounded monthly" does NOT mean 7% per month. It is still 7% per year which is percent per month. In n years, there are, of course, 12n months so it will be
And this should have been40,000 x .095^n=x
Set them equal and solve for n.
I am not really sure how to set up the equation and I'm pretty sure I started off wrong, help is much appreciated!
Thank you!
Dan
this is what i have so far, thanks for all your help guys, I really appreciate it!
50000 (1.00583)^12n = 40000 (1.095)^n
log(50000 x 1.00583^12n) = log(40000 x1.095^n)
log 50000 + log 1.00583^12n = log 40000 + log 1.095^n
log 50000 + 12n log 1.00583= log 40000+ n log 1.095
and this is sort of where i get a bit lost, below is what i did.
log 50000 - log 40000= -12n log 1.00583 + n log 1.095
Im not sure how to simplify it anymore. so i tried this
__ log 50000- log 40000____ = n+n
-12 + log 1.00583 + log 1.095
Can I get a little more help simplifying it, because I know I did it wrong :/ thanks again!