Problema Solution
how many years will it take for $480 to grow to $1,014.98 if invested at 5% compounded annually?
Answer provided by our tutors
Let
A = $1,014.98 the future value after t year
P = $480 is the principal
t = the number of years
m = 1 the number of compounding periods per year
n = m*t = t the number of compounding periods
r= 0.05 or 5% the annual interest rate
A = P(1 + r)^n
1,014.98 = 480(1 + 0.05)^t
480*1.05^t = 1014.98
1.05^t = 1014.98/480
........
........
t = 15.35 years
It will take 15.35 years.