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consider an investment of $6000 that earns 4.5% interest.


How long would it take for the investment
to reach $15,000 if the interest is
compounded monthly? Round your
answer to the nearest tenth.

Respuesta :

semsee45

Answer:

20.4 years (nearest tenth)

Step-by-step explanation:

Compound Interest Formula

[tex]\large \text{$ \sf A=P\left(1+\frac{r}{n}\right)^{nt} $}[/tex]

where:

  • A = final amount
  • P = principal amount
  • r = interest rate (in decimal form)
  • n = number of times interest applied per time period
  • t = number of time periods elapsed

Given:

  • A = $15,000
  • P = $6,000
  • r = 4.5% = 0.045
  • n = 12 (monthly)

Substitute the given values into the formula and solve for t:

[tex]\implies \sf 15000=6000\left(1+\frac{0.045}{12}\right)^{12t}[/tex]

[tex]\implies \sf \dfrac{15000}{6000}=\left(1.00375\right)^{12t}[/tex]

[tex]\implies \sf 2.5=\left(1.00375\right)^{12t}[/tex]

[tex]\implies \sf \ln (2.5)=\ln \left(1.00375\right)^{12t}[/tex]

[tex]\implies \sf \ln (2.5)=12t \ln \left(1.00375\right)[/tex]

[tex]\implies \sf t=\dfrac{\ln (2.5)}{12 \ln (1.00375)}[/tex]

[tex]\implies \sf t=20.40017123[/tex]

Therefore, it would take 20.4 years (nearest tenth) for the investment to reach $15,000.

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