Peggy deposited $83 into a savings account. What interest rate will cause her money to double in approximately 42 years? 1.7% (Apex)

Question

asked Oct 6, 2020 43.8k views

2 Answers

QJGui · Answer 1 · 2020-10-09T23:35:59+0000

Answer: Yes, the approximate annual rate is 1.7%

Explanation:

Here, the principal amount, P = $ 83,

Time, t = 42 years

Amount after 42 years, A = $ 166

Let the annual rate of interest = r %,

By the compound interest formula,

We can write,

P(1+(r)/(100))^t = A

83(1+0.01r)^(42)=166

(1+0.01r)^(42)=2

1+0.01r=1.01664043939

0.01r=0.01664043939

$r=1.664043939\%\approx 1.7\%$

⇒ The annual rate of interest = 1.7% ( Approx )