Respuesta :
Answer:
It will take 10 years for her money to double.
Step-by-step explanation:
The compound interest formula is given by:
[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]
Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the number of years the money is invested or borrowed for.
In this exercise:
We want to find t for which the money doubles, that is, t when A = 2P.
Compounded monthly, an year has 12 months, so n = 12
Interest rate of 7%, so r = 0.07.
The following logarithm property is used:
[tex]\log{a^{t}} = t\log{a}[/tex]
So
[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]
[tex]2P = P(1 + \frac{0.07}{12})^{12t}[/tex]
[tex](1.0058)^{12t} = 2[/tex]
[tex]\log{(1.0058)^{12t}} = \log{2}[/tex]
[tex]12t\log{1.0058} = \log{2}[/tex]
[tex]t = \frac{\log{2}}{12\log{1.0058}}[/tex]
[tex]t = 10[/tex]
It will take 10 years for her money to double.
