? asked in Education & ReferenceHomework Help · 10 years ago

Mrs. Martinez deposits$1000 into a CD that pays 5 percent interest compounded annually.?

Mrs. Martinez deposits$1000 into a CD that pays 5 percent interest compounded annually.Her husband says that it will take twenty years for the money to double.Is this correct?Explain how Mr.Martinez could use an algebraic method to determine how long it will take.

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  • 10 years ago
    Best Answer

    Use this formula P = C (1 + r) t

    So in this case you would get

    P=1000(1+0.05)^t

    where P is the future value, C is the current deposit, r is the interest rate, and t is the time in years.

    Calculate this out and it comes to $2653.

    So no it doesn't take 20 years it would take less than that

  • swarts
    Lv 4
    3 years ago

    why are you giving us tricks and directing us to help links? ... and you forgot that tax may well be due on the interest earned according to annum {united statesfederal earnings tax began in 1913} >> My calculator says 141.6 years. {fairly the same because of the fact the log solutions.}

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