Question

Teri invested $1500 in an account with an interest rate of 2.25% compounded continuously. How long will it take for Teri's account to earn $5000?

Answer 1

It will take 54 days for Teri's account to earn an amount of $5000.

What is compound interest?

Compound interest, also known as interest on principal and interest, is the practice of adding interest to the principal amount of a loan or deposit.

It occurs when interest is reinvested, or added to the loaned capital rather than paid out, or when the borrower is required to pay it, so that interest is generated the next period on the principal amount plus any accumulated interest. In finance and economics, compound interest is common.

It is given by formula

A = $p*e^{r*t}$

where:

A is final amount

p is principal amount

r is rate of interest and

t, is time period

Given: A= $5000, p=$1500, r=2.25% = 0.0225

To find: time period to get compounded amount

5000=1500×$e^{0.0225*t}$

$e^{0.0225t}$ = $\frac{10}{3}$

0.0225t = ㏑ ($\frac{10}{3}$)

t = 53.5099 ≈ 54 days  

Learn more about compound interest here:

brainly.com/question/3989769

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