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Find how many years it would take for an investment of $4500 to grow to $8800 at an annual interest rate of 6.8% compounded daily

User Adeltahir
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1 Answer

2 votes

Answer:

6.92 years

Explanation:

To solve this problem, we can use the formula for compound interest:

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

where:

A = the final amount (in this case, $8800)

P = the initial investment (in this case, $4500)

r = the annual interest rate (in decimal form, so 6.8% = 0.068)

n = the number of times the interest is compounded per year (in this case, daily, so n = 365)

t = the number of years

We want to solve for t, so we can rearrange the formula as follows:

t = (ln(A/P)) / (n ln(1 + r/n))

where ln is the natural logarithm.

Plugging in the given values, we get:

t = (ln(8800/4500)) / (365 ln(1 + 0.068/365))

t ≈ 6.92

Therefore, it would take about 6.92 years (or about 7 years) for the investment to grow to $8800 at an annual interest rate of 6.8% compounded daily.

User Steboc
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