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30 March, 23:22

How long will it take for the balance of an account to double if the savings account earns 0.75% annual interest compounded monthly?

Hint: Set up the problem using the formula: A=P (1+r/n) ^nt.

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  1. 30 March, 23:44
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    Let the amount deposited (principal) be x, then the amount after the required time = 2x.

    A = P (1 + r/n) ^nt: where A is the future value = 2x, P is the principal = x, r is the rate = 0.75%, n is the number of accumulation in a year = 12, t is the number of years.

    2x = x (1 + 0.0075/12) ^12t

    2 = (1 + 0.000625) ^12t

    log 2 = 12t log (1.000625)

    log 2 / log (1.000625) = 12t

    1109.38 = 12t

    t = 92 years
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