Question

A $22,000 loan was taken out. If $24,805 is due at the end of the loan after being compounded daily at 2.5%, how many

years was the loan for? (Round to the nearest tenth of a year)
Provide your answer below

Answer 1

9514 1404 393

Answer:

4.8 years

Explanation:

Solving the compound interest formula for the number of years gives ...

t = log(A/P)/(n·log(1 +r/n))

where principal P invested at rate r compounded n times per year produces value A after t years.

t = log(24805/22000)/(365·log(1 +0.025/365)) ≈ 4.800

The loan was for 4.8 years.