You invest $7500 into a mutual fund that is expected to earn 7% per year. How long will it take the fund to be worth $15,000?
+23246 An appropriate formula is: A = P·(1 + r)n
where A = final amount = $15,000.00
P = principal = initial amount = $7500.00
r = yearly rate, as a decimal = 0.07
n = number of years =
---> 15,000 = 7500(1 + 0.07)n
---> 2 = 1.07n (divide both sides by 7500)
---> log(2) = log(1.07n) (because the unknown is in the numerator, take the log of
both sides)
---> log(2) = n·log(1.07) (property of logs)
---> log(2) / log(1.07) = n (divide both sides by log(1.07))
If you finish this, you will have your answer.
