Question

A person invests 9000 dollars in a bank. The bank pays 5% interest compounded

semi-annually. To the nearest tenth of a year, how long must the person leave the
money in the bank until it reaches 22300 dollars?
r
nt
A =P(1+5)
1

Answer 1

10.1 years.

Explanation:

It is given that,

Principal = 9000

Rate of interest = 5%

No. of times interest compounded = 2 times in an year

Amount after certain time = 14800

The formula for amount:

where, P is principal, r is rate of interest, n is no. of times interest compounded in an year and t is time in years.

Substitute the given values in the above formula.

Taking log both sides.

Therefore, the required time is 10.1 years.