The balance function \(B(t)\) is an increasing exponential function. To find its doubling time, set \(B(t)\) equal to twice its initial value and solve for \(t\text{.}\) That is,
\begin{equation*}
B(t) = 3000(1.0443)^{t} = 2 \cdot 3000.
\end{equation*}
Dividing both sides by \(3000\) results in
\begin{equation*}
1.0443^t = 2.
\end{equation*}
This equation cannot be solved algebraically as the unknown, \(t\text{,}\) is in the exponent. Solving such equations requires logarithmsβthe topic of Chapter 6.
However, an
approximate solution can be found by either graphing the function
\(y = 1.0443^x\) and then finding the point on the graph where
\(y = 2\text{,}\) or by evaluating
\(B(t) = 3000(1.0443)^{t}\) for a few suitable values of
\(t\text{:}\)
| \(t\) |
\(10\) |
\(15\) |
\(16\) |
\(17\) |
\(32\) |
| \(B(t)\) |
\(4627.79\) |
\(5747.78\) |
\(6002.41\) |
\(6268.32\) |
\(12009.64\) |
This shows that it takes approximately
\(16\) years for your initial deposit
\(\$3000\) to double to
\(\$6000\text{.}\) That is, the doubling time is approximately
\(16\) years. After approximately another
\(16\) years, the balance
\(\$6000\) doubles again, and so on. After
\(48\) years, your balance will be roughly
\(\$24000\text{.}\)