John sees an ad for a bank that says they will double Johns

John sees an ad for a bank that says they will double John\'s money. John would then have to invest at an annual interest rate of 6 percent (compunded monthly). How much time would it take for him to double 1500 dollars?

Solution

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

compunded monthly=> n=12

A=1500*2=3000$

P=1500$

r=6%=0.06

3000=1500(1+(0.06/12))^12t

2=(1.005)^12t

12t =(ln2)/(ln1.005)

t =(1/12)[(ln2)/(ln1.005)]

t =11.58 years

it takes 11.58 years for him to double 1500$