Question

A loan of $12,000 is made at 5.25% interest, compounded annually. After how many years will the amount due reach $22,000 or more?

Answer 1

About 16 years

Explanation:

First we need to figure out 5.25% of 12000

5.25 x 0.12000 = 0.63

Then we move the decimal

630

Then we need to figure out how many years it will take to reach $22000

Since we already owe $12000, we can just divide using $10000 because 10000 + 12000 = 22000

10000/630 = 15.87

Which is about 16 years