Question

Holly invests $1000 in an account that pays an interest rate of 6.25%. How many years will it take for the account to reach $5500? Round your answer to the nearest hundredth.

Answer 1

It takes 72 years to get $5500.

Explanation:

The amount in her bank account increases as she gets interest at a rate of 6.25% per annum.

Let A be the final amount , P be the principal amount , r be the rate of interest and t be the number of years taken.

A = P ( 1 + rt )

The final amount = $5500

Principal = $1000

r = 0.0625

Substituting the above values in the given equation,

5500 = 1000 (1 + 0.0625t)

t =
`(4.5)/(0.0625)`

t = 72 years.

It takes Holly 72 years to get $5500 amount from her bank.