MATH GENIUSES help?!! LOGS!!!!!?

Question

dDien invests 15000 at 8.4% p.a. compounded monthly. He will withdraw his money when it reaches 25000, at which time he plans to travel. U(base of n+1)=U x r(to the n) can be used to calculate the time needed U(base of n+1)=25000 after n months.

1. explain why r=1.007

2. how many months can he withdraw the money ?

Answer 1

1. r =1.007 because an annual interest rate of 8.4% is 0.7%/month. At that rate $100 becomes $100.70 after one month. You can see the multiplier is 1.007.

How many months does it take for $15,000 to become $25,000 at that rate of interest?  

($15,000) x (1.007)^x = $25,000

(1.007)^x  = 1.666*

X = 73 months and one week. You should get a similar answer using logs