Problem Statement

6
6/100
round(log(2)/log(1+0.06/12),0)

If P0 dollars are deposited in a bank account paying 6 % interest compounded monthly, then the account has value after N months. Using a graphing utility, find, to the nearest integer N, the number of months after which the account value doubles.

 
Step 1

We need to find the N-months value that makes the account value, , equal to double its initial investment value, P0.

Question Sequence

Question 1

Thus we need to solve = ·P0.

Incorrect
Correct

Question 2

This equation contains the variable N but also the "mystery quantity" P0.

All that we know about P0 is that it must be .

Incorrect
Correct

 
Step 2

Question Sequence

Question 3

To isolate the factor with N, and because P0 ≠ 0, we may divide each side of the equation by P0.

Incorrect
Correct

 
Step 3

Question Sequence

Question 4

Approximate the solution of graphically.

The figure shows the graphs of and .

Where the graphs intersect, the initial account value has doubled. At the point of intersection, the number of months N is approximately N = .

Incorrect
Correct