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October 1, 2014

October 1, 2014

Posted by **Jackie** on Friday, January 25, 2013 at 12:39pm.

b) 1475 invested at 6% annual interest (compounded yearly) after

When would the two investments have equal value?

- math -
**Reiny**, Friday, January 25, 2013 at 1:34pmlet the time be t

1150(1.09)^t = 1475(1.06)^t

46(1.09)^t = 59(1.06)^t

take log of both sides , and using simple log rules

log46 + tlog1.09 = log59 + tlog1.06

tlog1.09 - tlog1.06 = log 59 - lot 46

t(log 1.09 - log 1.06) = log 59 - log 46

t = (log59 -log46)/(log1.09 - log1.06) = 8.918

it would take appr 9 years

check:

1150(1.09^9 = 2497.68

1475(1.06)9 = 2491.98

using t = 8.918

1150(1.09)^8.918 = 2480.09

1475(1.06)^8.918 = 2480.13 , not bad

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