Answer to Question #318228 in Financial Math for Fii

Question

$500 is deposited in an account which bears 12% p.a. interest compounded monthly. How many years it would take to accumulate $500 to $806.11

Answer 1

A = P(1+ r/n)^nt

806.11 = 500(1 +12/1200)^12t

806.11/500 = (1.01)^12t

log1.61222 = 12t log 1.01

12t=log 1.6122/log 1.01

12t = 47.9996

t = 47.9996/12

t = 3.9999

4 years