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March 25, 2017

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doris browning deposited $8000 into a savings account paying 5.25% interest. how long will it take for her investment to grow to $10,100. The answer i got was 4yr 11mo 30 days but that is wrong someone please help

  • interest math - ,

    I am assuming you are using the standard compound interest method, simple interest is seldom used for periods longer than a year

    8000(1.0525)^n = 10100
    1.0525^n = 1.2625

    n log 1.0525 = log 1.2625
    n = 4.5554 years , assuming the rate is 5.25 per annum compounded annually

    at continuous compounding

    8000 e^(.0525n) = 10100
    e^(.0525n) = 1.2625
    take ln of both sides
    .0525n = ln 1.2625
    n = 4.4399 years

    btw:
    at simple interest
    8000 + 8000(.0525)n = 10100
    n = 5 years

    none of the 3 ways I used produces your answer, I have no idea how you got that.

  • interest math - ,

    I belive its 5 years.( asuming the interest rate is anual)

    8000x .0525 = 420
    (Check[8000/420*5=100])
    so 10100-8000 = 2100
    Finally 2100/420 = 5

    Hope that's right.

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