Question

Jerry Stevens wants to know how long it will take $1,100 to amount to $1,750 at a simple interest rate of 8 1/2%. Could you help Jerry? Round time in years to the nearest tenth.

Answer 1

To solve the question we use the compound interest formula given by:
FV=P(1+r/100)ⁿ
where:
FV=future value
P=principle
r=rate
n=time
thus plugging our values in the formula we obtain:
1750=1000(1+8.5/100)ⁿ
simplifying and solving for n we obtain:
1.750=1.085ⁿ
n=ln 1.750/ ln 1.085
n=6.86~6.9 years