Question

At age 25 james, thinking ahead deposits 2500 into a retirement account with an average annual interest rate of 11%. Find James age when his investment is worth 10 times his original value.

I believe the equation would be y=2500(1+.11)^t but what would t be?? Pls help thank you!!!

Answer 1

We want y to equal 25,000, ten times the original investment. Solving this equation for t, we have a time period of 22.06 years - however, we must round up, so he must wait 23 years. Then, his age will be 25+23=48.