Exponential growth and compound interest

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Homework Help Overview

The discussion revolves around the concepts of exponential growth and compound interest, specifically focusing on the formula A = P(1+i)^n. Participants are examining the application of this formula in a problem context related to financial growth.

Discussion Character

  • Exploratory, Conceptual clarification, Mathematical reasoning

Approaches and Questions Raised

  • Participants share their attempted solutions and seek verification of their methods. There is mention of the "rule of 72" as a conceptual tool for estimating the time required for an investment to double, prompting further exploration of its relevance to the problem.

Discussion Status

The discussion includes attempts to verify methods and explore related concepts. Some participants express gratitude for the assistance received, indicating a collaborative atmosphere. However, there is no explicit consensus on the correctness of the methods presented.

Contextual Notes

Participants are working within the constraints of homework guidelines, seeking peer verification rather than definitive solutions.

alexandria
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Homework Statement


upload_2016-5-23_19-58-57.png


Homework Equations


A = P(1+i)^n

The Attempt at a Solution


Here is my attempted solution, can someone please verify if my method is correct!
Thanks in advance![/B]
upload_2016-5-23_19-58-38.png
 
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alexandria said:

Homework Statement


View attachment 101167

Homework Equations


A = P(1+i)^n

The Attempt at a Solution


Here is my attempted solution, can someone please verify if my method is correct!
Thanks in advance![/B]
View attachment 101166

It looks OK.
 
This is a good example of the "rule of 72", which is a rule of thumb used by financial people. Basically it says that the number of years it takes for an investment to double is equal to 72 divided by the annual percentage rate. In this case 72/4 = 18, quite close to your more exact solution.
 
ok thanks for the help!
 

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