Results 1 to 3 of 3

Thread: Help

  1. #1
    Newbie
    Joined
    Nov 2006
    Posts
    10

    Help

    1) if an old stamp is currently worth $60. The stamp's value will grow exponential by 15% each year. When will the stamp be wroth three times its intial value?

    2) Mark invests $500 in a savings plan that pays interest, which is compounded monthly. At the end of 10 years, his intial investment is worth $909.70. What interest rate did the plan pay?
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Grand Panjandrum
    Joined
    Nov 2005
    From
    someplace
    Posts
    14,972
    Thanks
    5
    Quote Originally Posted by aaasssaaa View Post
    1) if an old stamp is currently worth $60. The stamp's value will grow exponential by 15% each year. When will the stamp be wroth three times its intial value?

    If $\displaystyle p$ is the principle and $\displaystyle r$ the intrest rate (in %) the value after $\displaystyle n$ years is:

    $\displaystyle
    V=p\,(1+r/100)^n
    $

    Now for your problem you want $\displaystyle V=3p$ and $\displaystyle r=15$ and solve for n:

    $\displaystyle p\,(1.15)^n=3\,p$,

    so:

    $\displaystyle n\ \ln(1.15)=\ln(3)$,

    so:

    $\displaystyle n=\frac{\ln(3)}{\ln(1.15)}\approx 7.86 \mbox{ years}$

    RonL
    Follow Math Help Forum on Facebook and Google+

  3. #3
    Grand Panjandrum
    Joined
    Nov 2005
    From
    someplace
    Posts
    14,972
    Thanks
    5
    Quote Originally Posted by aaasssaaa View Post
    2) Mark invests $500 in a savings plan that pays interest, which is compounded monthly. At the end of 10 years, his intial investment is worth $909.70. What interest rate did the plan pay?
    If $\displaystyle r$ is the % rate per period then you have:

    $\displaystyle 500\ (1+r/100)^{120}=909.70$

    which you need to solve for $\displaystyle r$ which is the interest rate per
    month.

    This is because 10 years is 120 periods.

    RonL
    Follow Math Help Forum on Facebook and Google+


/mathhelpforum @mathhelpforum