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    Growing Interest Rate Specified

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    How long will it take for $400 to grow to $1000 at the interest rates specified?
    a. 4%
    b. 8%
    c. 16%

    Please show all work.

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    Solution Preview

    One period gives the principal multiplied by the factor (1 + x%/100) for brevity x%/100 =x where x is the correspondent fractional percent.

    In the next period the new principle is P(1 +x) and at the end of the period we obtain this multiplied again by (1+x) So for n periods the new principle returned is P(1+x)^n

    So now we want $400 to return as $1000 in n ...

    Solution Summary

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