A person puts $100.00 into a savings account with 24% annual interest rate (comp

Question

A person puts $100.00 into a savings account with 24% annual interest rate (computed continuously l. The value of such an investment is given by: V Per), where P is principal invested, r ist annual total interest exceeded $5.00? Round up to the nearest whole year. Hint: For convenience, the credit union provided the following table of the exponential function interest rate, and t is the number of years receiving interest. After how many years has the r t 0.024 1.0243 0.048 1.0492 0.072 1.0747 0.096 1.1008 0.120 1.1275 0.144 1.1549

Explanation / Answer

Total interest = $ 5.0

so, current worth of the money = $ 105.00

so, 105 = 100e0.024t

=> (105/100) = e0.024t

taking ln on both sides we get

ln(105/100) = 0.024t

=> t = (1/0.024) ln(105/100) = 2.03 years

so, after 2 years, the total interest will exceed $ 5.00.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.