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If an investment of ​1149 earned interest of ​417 at ​

compounded monthly for how many years and months was the money​
invested?

User Deathtiny
by
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1 Answer

5 votes

Final answer:

The money was invested for approximately 5 years and 7 months.

Step-by-step explanation:

To determine the number of years and months for the investment, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

  • A is the final amount (including the interest)
  • P is the principal (initial amount)
  • r is the annual interest rate (expressed as a decimal)
  • n is the number of times interest is compounded per year
  • t is the number of years

In this case, we have A = $1149 + $417 = $1566, P = $1149, r = 0.1, and n = 12 (compounded monthly). We need to solve for t:

$1566 = $1149(1 + 0.1/12)^(12t)

Dividing both sides by $1149:

1.3627 = (1.0083)^(12t)

Taking the natural logarithm of both sides:

ln(1.3627) = ln((1.0083)^(12t))

Using the property of logarithms, we can bring down the exponent:

12t ln(1.0083) = ln(1.3627)

Dividing both sides by 12 ln(1.0083):

t = ln(1.3627) / (12 ln(1.0083))

Using a calculator, we find t ≈ 5.59 years.

Since the interest is compounded monthly, we can convert the remaining decimals into months:

0.59 years ≈ 0.59 * 12 ≈ 7.08 months.

Therefore, the money was invested for approximately 5 years and 7 months.

User Salhin
by
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