plz help

Question

4) You invest $1000 in an account paying 6% compounded monthly. How long will it take to double your investment?

Answer 1

(4).

Calculate the  Compound Interest by using formula for n compoundings per year :

A = P(1 + r/n)^{n * t}, where A = balance, P = principal, t = time in years and r = annual interest rate (in decimal form).

Principal : P = $1000.

Amount : A = double investment = $2000.

Annual interest rate : r = 6 % = 0.06.

For monthly compounding : n = 12.

To find the value of t in years, substitute A = 2000, P = 1000, n = 12 and r = 0.06 in the above formula.

The time is 11.58 years.