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a loan of 38000 is made of 3% interest, compounded annualy. after how many years will the amount due reach 49000 or more

1 Answer

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Answer:

the time period is 9 years

Explanation:

The computation of the number of years is as follows:

As we know that

Future value = Present value × (1 + rate of interest)^number of years

$49,000 = $38,000 × (1 + 0.03)^number of years

$49,000 ÷ $38,000 = 1.03^number of years

tlog(1.03) = log($49 ÷ $38)

Now apply the log formula in calculator or in excel

t = log(49 ÷ 38) / log(1.03)

= 8.6

= 9 years

Hence, the time period is 9 years

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