how many years will it take for annes 200,000 to become 1,000,000 if the money is subjected to 7.5% simple interest rate?

Question

how many years will it take for annes 200,000 to become 1,000,000 if the money is subjected to 7.5% simple interest rate?

Answer 1

here we have 200k earning interest at 7.5% compounded annually. In "T" years this will be worth 200,000*(1.075)^T =K we want K to be 1million and we want to solve for T.

Soooo,

1,000,000/200,000 = 5 = (1+7.5%)^T

If we take natural logs of both sides we see ln5= ln(1.075)^T=Tln(1.075)

so T= ln(5)/ln(1.075) = 22.254 years or roughly 22 years and 3 months.

I am available to help during finals

Answer 2

Future Value: $1,023,339.73

PV (Present Value)	$201,061.72
N (Number of Periods)	22.500
I/Y (Interest Rate)	7.500
PMT (Periodic Deposit)	$100.00
Starting Amount	$200,000.00
Total Periodic Deposits	$2,200.00
Total Interest	$821,139.