Question

Cate purchases $1600 worth of stock and her broker estimates it will increase in value by 4.2% each year. After about how many years will the value of Cate’s stock be about $2000?

Answer 1

Since the money appreciates 4.2% each year, then:

2000=1600x(1.042)^n, where n is the number of years

Then:

1.25=1.042^n

ln 1.25=ln 1.042^n=n ln 1.042

n=5.424 years