Question

Terri 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

Answer:

53.51 years

Step-by-step explanation:

FV = PV e⁽ⁿˣ⁾

FV = Future Value = $5000

PV = Present Value = $1500

n = Interest Rate = 2.25%

x = time in years = ?

e = mathematical constant = 2.7183

So,

5000 = 1500 e⁽⁰°⁰⁰²⁵ˣ⁾

50 / 15 = e⁽⁰°⁰⁰²⁵ˣ⁾

㏑ (3.3333) = 0.0225x ㏑ (2.7183)

1.2040 = 0.0225x

x = 53.51 year

So, If compounded continuously at an APR of 2.25% the amount invested in an account of $1500 will accumulate to $5000 in 53.51 years.