Question

I invest $1000 in an account earning 6% compounded annually. How long will it take for the value to reach $1500?

Answer 1

P = $1000

I = 6%

S ≥ 1500

S = P(1 + i)ⁿ

If n = 8 then:

S = 1000 × (1.06)^8 = 1000 × 1,59384 = $1593.84 ≥ $1500

⇒ n = 8 years