Question

Riley invested her work bonus in a bond with a monthly simple interest rate of 0.8%. The bond earned her $5,016 total,of which $2,016 was interest. How many years was the money invested?

Answer 1

the total amount she have at the end was $5,016 dollars of which $2,016 was interenst, so with this information we know that at the beginig the save:

`5016-2016=3000`

now we can write the formula like:

`5016=3000(1+0.08)^t`

where t is the number of years, so we can solve for t

`\begin{gathered} (5016)/(3000)=(1+0.08)^t \\ 1.672=(1+0.08)^t \end{gathered}`

now we use the log properties so:

`\begin{gathered} \ln (1.678)=t\ln (1+0.08) \\ t=(\ln (1.672))/(\ln (1.08)) \\ t=6.68 \end{gathered}`