Question

Suppose you deposit $1,323.00 into an account today that earns 10.00%. It will take ___ years for the account to be worth $2,765.00.

Answer Format: Number: Round to: 2 decimal places.

Answer 1

As per compounding Interest Method, Future value of money deposit can be computed with following equation -

$FV = P(1+r)^{t}$

Where,

FV = Future value

P = Present value of deposit

r = rate of return

t = time (years)

We have following Information -

FV = $ 2,765

P = $ 1,323

r = 10%

t = ?

Putting the value above equation , we can calculate the time.

$2,765 = 1,323 (1.1)^{t}$

$(1.1)^{t} = \frac{2,765}{1,323}$

$(1.1)^{t} = 2.0899$

applying log both sides -

$t*log(1.1) = log(2.0899)$

$t = \frac{log(2.0899)}{log(1.1)}$

$t = \frac{0.3201}{0.0414}$

$t = 7.73$

Thus, It will take 7.73 years .

Use Log table or calculator to get log values.