Question

4300 dollars is placed in an account with an annual interest rate of 7%. To the nearest tenth of a year, how long will it take for the account value to reach 15700 dollars? A) 19.1 years

B) 14.5 years
C) 22.3 years
D) 17.8 years

Answer 1

To find out how long it will take for the account value to reach $15,700, we need to use the formula for compound interest. By solving the equation, we find that it will take approximately 19.1 years.

Step-by-step explanation:

To find out how long it will take for the account value to reach $15,700, we need to use the formula for compound interest: A = P(1 + r/n)^(n*t), where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years.

We have P = $4,300, r = 0.07, and A = $15,700. Let's solve for t.

$15,700 = $4,300(1 + 0.07/n)^(n*t)

By trial and error, we find that when t is approximately 19.1 years, the account value will reach $15,700. Therefore, the answer is A) 19.1 years.