How do you use the formula to solve these problems: Initial deposit of $1000, annual rate of 8.5% and final value is $1800?

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Answer 1 · 2016-02-09T03:03:32

Final Value $=("Initial Value")xx(1+i)^t$

Using the formula ...

Final Value $=("Initial Value")xx(1+i)^t$

$1800=(1000)(1+0.085)^t$

Simplify ...

$(1.085)^t=1.8$

Now take the log of both sides ...

$log(1.085)^t=log1.8$

$tlog(1.085)=log1.8$

$t=(log1.8)/(log1.085)~~7.2$ years

hope that helped