Question

David invested $220 in a savings account that offers a 3% return on the investment. The value of David's investment will be at least $400 after a period of
years.

Hint: Use the formula A = P(1 + r)t, where A is the amount after t years, P is the amount invested, r is the rate of interest, and t is the time period. Use a calculator to compute the answer, and round it off to the nearest year.

Answer 1

Hi there
The formula is
A=p (1+r)^t
A future value 400
P present value 220
R interest rate 0.03
T time?
We need to solve for t
A=p (1+r)^t divide each side by p to get
A/p=(1+r)^t take the log
Log (A/p)=t×log (1+r) divide both sides by log (1+r) to get
T=Log (A/p)÷log (1+r)
So
T=log(400÷220)÷log(1+0.03)
T=20.2 years round your answer to get
T=20 years

Hope it helps