Question

Question 1 (0.2 points) David has a savings account with a 9,000 balance today. The account earns an annual percentage rate of interest of 1.50%, compounded monthly. David plans to make no other deposits or withdrawals. How many years will it take David's account balance to double? Your Answer: Answer

Answer 1

We use the formula:
A=P(1+r/12)^12n
where
A=future value
P=present value
r=rate of interest
n=time period.

(2*9000)=9000*(1+0.015/12)^12n

2=(1.00125)^12n

Taking log on both sides;

log 2=12n*log 1.00125

n=1/12[log 2/log 1.00125]

=46.24 years(Approx).