Problema Solution
val Hooper deposited $11,600 in the bank on January 1 a few years ago. The bank pays an interest rate of 10% compounded annually, and the deposit is now worth $30,052. For how many years has the deposit been invested?
Answer provided by our tutors
P = $11,600 the principle
i = 10% or 0.10
t = years
A = $30,052 the future value
A = P(1 + i)^t
30052 = 11600(1 + 0.10)^t
1.1^t = 30052/11600
by solving we find
t = 9.99 years
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the deposit was invested for 9.99 years.