Solving exponential growth model problems ex 1

The video tutorial explains how to determine the time required for $1000 to double at an 11% interest rate compounded monthly. It introduces compound interest formulas, sets up the problem by defining variables, and demonstrates solving for time using logarithms. The final calculation shows that it takes approximately 6.33 years for the money to double.

What is the purpose of the compound interest formula in this context?

• To find the annual interest rate

• To calculate the initial investment amount

• To compute the monthly payment amount

• To determine the time required for an investment to double

Which formula is used for calculating compound interest when it is not continuous?

• a = P * e^(R * T)

• a = P * (1 + R / n)^(N * T)

• a = P * (1 + R / n)^(T)

• a = P * (1 + R * T)

What is the first step in solving for the time T in the compound interest equation?

• Divide both sides by the initial amount

• Divide both sides by the final amount

• Multiply both sides by the initial amount

• Add the interest rate to both sides

How is the exponent involving T isolated in the equation?

• By adding the initial amount to both sides

• By subtracting the final amount from both sides

• By taking the natural logarithm of both sides

• By multiplying both sides by the interest rate

What is the approximate time required for $1000 to double at an 11% interest rate compounded monthly?

• 8 years

• 7.2 years

• 6.33 years

• 5.5 years