21000=7000(1+.15/1)

Question

suppose william has only $7000 but still wants $21000 for a car. He finds a bank offering  15% interest compounded annually. How long will he have to leave his money in the account to have $21000?

A= amount of money after a certain period of time

P= principal of amount of money you start with

r= interest rate and is always represented as decimal

t-amount of time in years

n=number of times interest is compounded in one year

                             

formula = A=P(+r/n)nt

 

Answer 1

21000 = 7000( 1+ 0.15) ^n      / n=1 for annual compound.

 

  3 = ( 1.15) ^n   ( **)

 

n = log3/ log 1.15 =7.86 = 8 years

 

 If it asked how long will it take for 15% compound interest rate to triple would be the same, and solution of equation (**), would be the answer.