Posted by Kerrie on Sunday, April 19, 2009 at 5:20pm.
I wonder also how the answer can be 15 years. Go to the following site, with the calculator for figuring out compound interest.
Since you want to know how many years it will take:
1. click on YEARS
2. Input Principal = 500
3. Input Total = 1000
4. Input Rate = 5
I get: 14.2067!
Here's another calculator to use: http://www.moneychimp.com/calculator/compound_interest_calculator.htm
When I used 14 as the number of years = 989.97
When I used 15 as the number of years = 1039.46
You were only asked to end up with $1,000.00
Here's the formula : M = P(1+i)n
M = final amount including principal
P = principal amount
i = rate of interest per year
n - number of years invested
Most people use the compound interest calculator! Please check all your numbers carefully.
Sra is right.
The "calculator" on that webpage is using this formula
Amount = Principal(1+i)^n
we have 1000=500(1.05)^n
2 = 1.05^n
take log of both sides
log2 = log(1.05)^n
log2 = nlog1.05
n = log2/log1.05 = 14.2
after 14 years, your money has not yet doubled, close, but not yet.
Amount = 500(1.05)^14 = 989.97
So I guess they are right at 15, since you have to go into the 15th year to double your deposit.
Economics - Ben deposits $5000 now into an account that earns 7.5 percent ...
math - Deposits of $1,000, $1,100 and $680 were made into a savings account, the...
value of money - Deposits of $1,000, $1,100 and $680 were made into a savings ...
geometry - A person deposits $500.00 into a savings account and pays 5% annual ...
business math - Bob makes his first deposit into an IRA earning % compounded ...
business math revised - Bob makes his first $800 deposit into an IRA earning 7% ...
Math - Lee Holmes deposited $15,000 in a new savings account at 9% interest ...
MATH HOMEWORK HELP PLEASE ANSWER - Lee Holmes deposited $15,000 in a new savings...
Economics - Finance - If your bank pays 5.5 percent interest on savings deposits...
Math - Lee Holmes deposited $16,600 in a new savings account at 9% interest ...
For Further Reading