Question

You deposit $10,000 into a bank account at 2% annual interest. How long will it take for the $10,000 to compound to $30,000?

Answer 1

Answer: time = 55.48 years

Explanation:

Given:

Principal amount = $10000

Interest rate = 2% p.a

Amount = $30000

We can evaluate the time taken using the following formula:

$Amount=Principal(1+\frac{r}{100})^{t}$

$30000 = 10000\times(1+\frac{2}{100})^{t}$

Solving the above equation, we get

$1.02^{t} = 3$

Now taking log on both sides, we get;

$t\ log(1.02) = log(3)$

time = 55.48 years