Question

Given the formula A = P(1 + i)^n, where A = 8,000, P = 6,500, and i = 0.014, what is the value of n?

A) n = 2
B) n = 3
C) n = 4
D) n = 5

Answer 1

To find the value of n in the given formula, substitute the given values into the formula, isolate the exponent term, and use logarithms to solve for n.

Step-by-step explanation:

To find the value of n in the formula A = P(1 + i)^n, where A = 8,000, P = 6,500, and i = 0.014, we can use algebraic steps to solve for n. Substitute the given values into the formula: 8,000 = 6,500(1 + 0.014)^n. Divide both sides by 6,500 to isolate the expression: (1 + 0.014)^n = 8,000/6,500. Use logarithms to solve for n: n = log(8,000/6,500) / log(1 + 0.014). Calculate the value of n using a calculator, rounding to the nearest whole number. The value of n is approximately 3.