Question

brian invests £8500 into his bank account. he receives 5% per year compound interest. how many years will it take for brian to have more than 10000

Answer 1

It would take 4 years for Brian to get more than £10000

Explanation:

To work this out, you need to turn the 5% annual interest into a multiplier, which is 1.05

To work out the years taken, start with an estimate, such as 5 years

£8500 x 1.05^5 = £10848.39

Despite this going over £10000, you need to find out the exact year it surpasses the amount, so I lowered the amount of years to 3 and 4 to see which year it goes past £10000

£8500 x 1.05³ = £9839.81

Since after 3 years it hadn't gone past £10000, I knew that the exact year was year 4

£8500 x 1.05^4 = £10331.80