Solve the problem.
-$\$ 20,000$ is invested at $5.5 \%$ interest compounded monthly. How long will it take for the investment to double? Round to the nearest tenth of a year
A) $12.6 \mathrm { yr }$
B) $13.2 \mathrm { yr }$
C) $10.7 \mathrm { yr }$
D) $13.5 \mathrm { yr }$

Question

Quizplus · Accepted Answer

The correct answer is A because the formula for compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years. In this case, we have P = $20,000, r = 5.5%, n = 12 (since the interest is compounded monthly), and A = $40,000 (since we want the investment to double). Solving for t, we get t = log(2) / log(1 + 5.5%/12) = 12.6 years (rounded to the nearest tenth of a year).

Solve the Problem $20,000\$ 20,000$20,000 Is Invested At 5.5%5.5 \%5.5% Interest Compounded Monthly

Solve the Problem $\$ 20,000$ Is Invested At $5.5 \%$ Interest Compounded Monthly