if the person leaves the money in the bank, the time it will take for it to reach the given final amount is 6.3 years.
<h3>What is an interest in banking?</h3>
Interest is simply the amount of money a lender or financial institution receives for lending out money or pays for receiving money.
The formular for calculating compound interest is expressed as;
A = P(1 + r/n)^(n*t)
Where A is final amount, P is initial principal balance, r is interest rate, n is number of times interest applied per time period and t is number of time periods elapsed.
Given the data in the question;
- Initial principal balance P = $4000
- Interest rate r = 5.5% anuually = 5.5/100 = 0.055
- Final amount A = $5600
- Time t = ?
We substitute our given values into the expression above.
A = P(1 + r/n)^(n*t)
5600 = 4000(1 + 0.055/1)^(1*t)
5600 = 4000( 1.055 )^t
( 1.055 )^t = 5600 / 4000
( 1.055 )^t = 1.4
We take log of each sides
0.02325t = 0.1461
t = 0.1461 / 0.02325
t = 6.3
Therefore, if the person leaves the money in the bank, the time it will take for it to reach the given final amount is 6.3 years.
Learn more about compound interest here: brainly.com/question/27128740
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