Question

Suppose you deposit 2500 in a savings account that pays you 5% interest per year A. How many years will it take for your money to double ? B. How many years will it take for your account to reach 8,000?

Answer 1

A) 14.2 years B) 23.84 years

Explanation:

A = P( 1 + r/n)^nt P = 2500 A = 2P = 5000 r = 0.05 n = 1 FInd t

A = 8000 Find t

I used a financial calculator to find this

t = 14.2 years

A = P( 1 + r)^t

A/P = ( 1 + r)^t

5000/2500 = (1.05)^t

2 = 1.05^t I don't remember how to solve this for t

8000/2500 = 1.05^t t = 23.84 according to the fin calculator