Given:
P = $10000
r= 5%
Find:
we have to find the time for which initial bank deposit of $10,000 grow to $23,750 at 5% annual compound interest.
Step-by-step explanation:
The formula for compound interest is
First, convert R as a percent to r as a decimal
r = R/100
r = 5/100
r = 0.05 per year,
Then, solve the equation for t
t = ln(A/P) / n[ln(1 + r/n)]
t = ln(23,750.00/10,000.00) / ( 1 × [ln(1 + 0.05/1)] )
t = ln(23,750.00/10,000.00) / ( 1 × [ln(1 + 0.05)] )
t = 17.729 years
Summary:
The time required to get a total amount of $23,750.00 with compounded interest on a principal of $10,000.00 at an interest rate of 5% per year and compounded 1 times per year is 17.729 years.
(about 17 years 9 months)