Short Cut Math
Name: Loretta S
For compound interest that equation is
T=P(1+r)to the n power
my question is...What is a short cut to find the answer for n besides
guess and check?
ln(x^n) = n ln(x)
Algebra and logs are the keys to solving for n.
Given: T = P(1+r)^n
Solve for n
1.Divide both sides by P
T/P = (1+r)^n
2.Take the log of both sides (any log will do,
I like the natural log)
ln (T/P) = ln [(1+r)^n]
3.When you take a log, one property is that any exponents of inside the
log become coefficients of the log itself.
ln (T/P) = n [ln (1+r)]
4.Divide both sides by [ln (1+r)].
[ln(T/P)]/[ln (1+r)] = n
This will give you a definitive answer for n, without guessing and
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Update: June 2012