Question

A savings account earns 8% interest. If $1,000 is invested, how many years is it until each of the following amounts is on deposit?a. $1,360b. $2,720c. $4,316d. $6,848

Answer 1

a. 4 years

b. 19 years

c. 19 years

d. 25 years

Step-by-step explanation:

The number of years, n is calculated for each future value as follows :

a. $1,360

Pv = - $1,000

Pmt = $ 0

P/y = 1

r = 8 %

Fv = $1,360

n = ?

Using a Financial Calculator, the number of years, n is 3.9953 or 4 years

b. $2,720

Pv = - $1,000

Pmt = $ 0

P/y = 1

r = 8 %

Fv = $2,720

n = ?

Using a Financial Calculator, the number of years, n is 13.00 or 13 years

c. $4,316

Pv = - $1,000

Pmt = $ 0

P/y = 1

r = 8 %

Fv = $4,316

n = ?

Using a Financial Calculator, the number of years, n is 19.00 or 19 years

d. $6,848

Pv = - $1,000

Pmt = $ 0

P/y = 1

r = 8 %

Fv = $6,848

n = ?

Using a Financial Calculator, the number of years, n is 24.9991 or 25 years