Question

You deposit the same $10,000 into a bank account at 4% annual interest. How long will it take for the $10,000 to compound to $30,000?
N= I/Y= PV= PMT= FV= P/Y=

Answer 1

Answer:

time = 28 years

Step-by-step explanation:

Given,

principal amount = $10,000

rate = 4%

total amount = $30,000

According to compound interest formula

$A\ =\ P(1+r)^t$

where, A = total amount

            P = principal amount

            r = rate

            t = time in years

so, from the question we can write,

$30000\ =\ 10000(1+0.04)^t$

$=>\ \dfrac{30000}{10000}\ =\ (1+0.04)^t$

$=>\ 3\ =\ (1.04)^t$

by taking log on both sides, we will get

=> log3 = t.log(1.04)

$=>\ t\ =\ \dfrac{log3}{log1.04}$

=> t = 28.01

So, the time taken to get the amount from 10000 to 30000 is 28 years.