Question

A person invests 5,500 dollars in a bank. The bank pays 4.5% interest compounded annually. To the nearest tenth of a year, how long must the person leave the money

in the bank until it reaches $6,700 dollars?

Answer 1

Answer: 4.5 years

Work Shown:

A = P*(1+r/n)^(n*t)

6700 = 5500*(1+0.045/1)^(1*t)

6700/5500 = (1.045)^t

1.218182 = (1.045)^t

log( 1.218182 ) = log( (1.045)^t )

log( 1.218182 ) = t*log( 1.045 )

t = log(1.218182)/log(1.045)

t = 4.483724

t = 4.5

It takes about 4.5 years to reach $6700