Suppose $22,800 is invested in a daily compounded account at 6.97%. Approximately how long will it take for the balance to reach $51,300 ?

Answer 1

Hi Hadassah,

The formula for compound interest is A = P(1 + r/n)^nt

Just plug in the numbers and solve for t.

For example, if you deposited $2077.92 in an account compounds quarterly at 5% and wanted to know how long it would take to reach $9000, you would solve

9000 = 2077.62(1 + 0.0125)^4t

4.3319 = (1.0125)^4t

ln(4.3319) = (4t)(ln(1.0125)

t = ln(4.3319)/[4ln(1.0125)] ~ 29.5 years