Question

A person invests $1000 in a bank. The bank pays 6% interest compounded monthly. To the nearest tenth of a year, how long must the person leave the money in the bank until it reaches $3300

Answer 1

20 years approx

Explanation:

Step one:

given data

Principal= $1000

rate= 6%

Final amount A= $3300

Required

Time t

Step two:

the expression for the compound interest is given data

A= P(1+r)^t

t = ln(A/P) / r

substitute

t= ln(3300/1000)/0.06

t= ln3.3/0.06

t= 1.193/0.06

t=19.88 years

t= 20 years approx