# Thread: Solving Logarithms Financial math help

1. ## Solving Logarithms Financial math help

Hi there,

Im pretty desperate. I have a test on compound interest and financial math tomorrow and missed a lesson on Logarthims. The teacher apparently went through it quickly and just showed everyone how to solve the problems using their calculator which because i have not even heard of a logarithm before this, i feel completely lost. I have been searching the net but all the problems do not look similar to the ones I have been given to practice on.

heres an example...

5000 = 2,500(1.00125)^t

I understand that logs help to find the exponent and that the 5000 is the amount of money hoping to acquire and 2,500 is the principal amount. What i am confused about is how this relates to the formula a^y = x?????

Most importantly can someone walk me through the steps of entering this in my calculator???

Thanks to all for any help!!!!!

2. ## Re: Solving Logarithms Financial math help

Originally Posted by nkuchmak
5000 = 2,500(1.00125)^t

I understand that logs help to find the exponent and that the 5000 is the amount of money hoping to acquire and 2,500 is the principal amount. What i am confused about is how this relates to the formula a^y = x?????
If a^y = x, then y = LOG(x) / LOG(a)

2,500(1.00125)^t = 5000
1.00125^t = 5000/2500 = 2

So t = LOG(2) / LOG(1.00125)
OK?