Question

Ethan has $240,000 to invest today at an annual interest rate of 4%. Approximately how many years will it take before the investment grows to $486,000?

Answer 1

Answer:

17.98972134

18 years

Explanation:

Using the compound interest formula we can solve for time

$Principal * (1+ r)^{time} = Amount$

We post our know values

$240,000* (1+ 0.04)^{time} = 486,000$

And solve for the unknow

$(1.04)^{time} =486,000/240,000\\(1.04)^{time} = 2.025$

Now we have to use log properties to solve for time

$log_{1.04}2.025 = time$

$\frac{\log 2.025}{\log 1.04} =17.98972134$

It will take 18 years