Question

Jed deposited $400 into a bank that offers 3.9% interest rate, compounded daily. In how many years will his balance be $800?

Answer 1

17.7 years----------->Apex correct answer

Answer 2

18 years ( approx )

Explanation:

Since, if an amount is compounded daily,

Then, the final amount after t years is,

`A=P(1+(r)/(365))^(365t)`

Where, P is the principal amount

r is the annual rate ( in decimals ),

t is the number of years,

Given,

A = $ 800,

r = 3.9% = 0.039,

P = $ 400,

By substituting the values,

`800=400(1+(0.039)/(365))^(365t)`

`\implies t = 17.774\approx 18\text{ years}`

Hence, his balance will be $800 after approximately 18 years.