# Math Finite

How many years will it take for \$12,000 to grow to \$15,000 at 5.75% compounded monthly?

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1. Use the compound interest formula for
n=number of periods
R=monthly interest rate, 5.75%/12=0.479167%
P=present value of investment = \$12000
F=future value of investment = \$15000
Then
F=ARn
15000=12000(1.00479167)n
1.00479167n = 15000/12000=1.25
take log on both sides
n*log(1.00479167)=log(1.25)
n=log(1.25)/log(1.00479167)
=46.68 months
=4 years (approx.)

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posted by MathMate

CAMY

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