Question

A person invests 4500 dollars in a bank. the bank pays 7% interest compounded annually. to the nearest tenth of a year, how long must the person leave the money in the bank until it reaches 14900 dollars?

Answer 1

A = Ao * (1+ i)^n amount Ao invested for n yrs at i/yr

14900 = 4500 (1.07)^n

3.311 = (1.07)^n

log 3.311 = n log 1.07 = n* .0294

n = log 3.311 / .0294 = .52 / .0294 = 17.6 yrs

Check:

Money will double about very 70 / 7 = 10 yrs

At 10 yrs around 9000 return

At 20 yrs 18,000 return - result appears reasonable