Answer:
Given formula is :
S = [tex]8500e^{0.127t}[/tex]
We have p = 8500
r = 12.7% or 0.127
(a) when t = 18 months or [tex]\frac{18}{12}=1.5[/tex] years
S = [tex]8500e^{0.127(1.5)}[/tex]
=[tex]8500e^{0.1905}[/tex]
=[tex]e^{0.1905}[/tex]= 1.20985
S = $10283.73
(b) Investment doubles means S = [tex]8500\times2=17000[/tex]
[tex]17000=8500e^{0.127t}[/tex]
[tex]\frac{17000}{8500}=e^{0.127t}[/tex]
=> [tex]2=e^{0.127t}[/tex]
Taking log on both sides
[tex]ln(2)=ln(e^{0.127t})[/tex]
We get t = 5.45 years
