Question

Sam invest $4000 in an account that compounds interest continuously and earns 5.5% how long will it take for his money to reach $80,000 round to the nearest 10th of a year

Answer 1

Answer:

54.5 years.

Step-by-step explanation:

From the above question, we are asked to find the time

The formula for Time(t) =

t = log(A/P) / n[log(1 + r/n)]

A = Amount accumulated after a particular interest and period of time = $80,000

P = Principal (Money invested) = $4,000

r = rate = 5.5% = 0.055

n = compounding frequency = compounding continuously

n = number of days in a year × number of hours in a day

= 365 days × 24 hours = 8760

t = log(A/P) / n[log(1 + r/n)]

t = log(80,000/4,000) /8760[log(1 + 0.055/8760)]

t = log(80000 ÷ 4000) ÷ (8760 × [log(1 + 0.0000062785)]

t = 54.468367222 years

Approximately to the nearest tenth of a year, therefore, the length of time it will it take for his money to reach $80,000 is 54.5 years