We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
a.(2*500)=500*(1.06)^n
2=(1.06)^n
Taking log on both sides;
log 2=n*log (1.06)
n=log 2/log (1.06)
=11.90 years(Approx).
b.(2*500)=500*(1.1)^n
2=(1.1)^n
Taking log on both sides;
log 2=n*log (1.1)
n=log 2/log (1.1)
=7.27 years(Approx).
c.(2*500)=500*(1.2)^n
2=(1.2)^n
Taking log on both sides;
log 2=n*log (1.2)
n=log 2/log (1.2)
=3.80 years(Approx).
d.(2*500)=500*(2)^n
2=(2)^n
Taking log on both sides;
log 2=n*log (2)
n=log 2/log (2)
=1 year.
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