You invest $2,000 in a savings account that offers an annual interest rate of 5%, compounded annually. How long will it take for your investment to grow to $3,000?Use the formula A=P(1+nr)nt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years. Round your answer to the nearest hundredth.
Q. You invest $2,000 in a savings account that offers an annual interest rate of 5%, compounded annually. How long will it take for your investment to grow to $3,000?Use the formula A=P(1+nr)nt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years. Round your answer to the nearest hundredth.
Identify values: Identify the values of P, r, n, and A.P=2000r=0.05n=1A=3000
Use formula and solve: Use the formula A=P(1+nr)nt and solve for t.3000=2000(1+0.05)t
Divide and simplify: Divide both sides by 2000.20003000=(1.05)t1.5=(1.05)t
Take natural logarithm: Take the natural logarithm (\ln) of both sides to solve for t. ln(1.5)=ln((1.05)t)ln(1.5)=t⋅ln(1.05)
Isolate and solve: Divide both sides by ln(1.05) to isolate t.t=ln(1.05)ln(1.5)
Calculate value: Calculate the value of t.t=ln(1.05)ln(1.5)t≈0.048790.405465t≈8.31It will take approximately 8.31 years for your investment to grow.
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