Word Problem: How long will it take to double $1000 if invested at 6% compounded monthly?

Question

Please help with this problem...Thank you
Formula:
A= P(1+r/n/)^nt
r= rate, P= principal amount, t=time (year), n= how many times a year (in this problem it goes by months)

Answer 1

We want A = $2000, P = $1000, r = 0.06 (6/100), n = 12, and we need to find t. So we have
2000 = 1000 (1 + 0.06/12)^(12t)
=> (1 + 0.005)^(12t) = 2
=> 12t log (1.005) = log 2
=> t = log 2 / (12 log 1.005)
= 11.58 years (2 dp)
So it will take 11 years 7 months (note we have to round up to the next month because that is when interest is paid; in this case it was also the nearest month).

Answer 2

1000 x .06= $60 (a year) $1000 / $60 = 16.6 (16 years and 6 months) years to break even...( i tryed to break it down in very simple terms for you.... To check ur answer take 16.6 (years) x $60 (yearly payment)= 1000