Question

You just won $30,000 and deposited your winnings into an account that pays 3.9 percent interest, compounded annually. How long will you have to wait until your winnings are worth $75,000?

Answer 1

it will take 23.97 year to become $75000 from $30000

Step-by-step explanation:

We have given initial amount to be deposited = $30000

Rate of interest r = 3.9 %

Future value A = $75000

We have to find the time taken to reach the amount $75000 from $30000

We know that future value is equal to
`A=P(1+(r)/(100))^n`, here A is future value P is initial amount to be deposited, r is rate of interest and n is time period

So
`75000=30000(1+(3.9)/(100))^n`

`2.5=1.039^n`

Taking log both side

log 2.5 = n log 1.039

n×0.0166 = 0.3979

n = 23.97 year

So it will take 23.97 year to become $75000 from $30000