Problema Solution

How many years will it take for $490 to grow to $1064.55 if it’s invested at 5 percent compounded annually?

Answer provided by our tutors

P = $490 the principal


r = 0.05 or 5% annual interest rate


A = $1064.55 the future value


t = the time in years


A = P(1 + r)^t


Plug the values into the last equation:


1064.55 = 490(1 + 0.05)^t


490(1 + 0.05)^t = 1064.55


1.05^t = 1064.55/400

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t = 20.06 yr


It will take 20.06 years for $490 to grow to $1064.55.