Question

A person invests 8000 dollars in a bank. The bank pays 4.75% interest compounded daily. To the nearest tenth of a year , how long must the person leave the money in the bank until it reaches 20400 dollars?

Answer 1

The number of days for which the money is left to reach the 20,400$ mark is; 21.28 days

Compound interest

The final amount to be reached is; $20400

The principal amount is; $8,000 and at. rate of 4.75 % compounded.

Hence, it follows that;

• 20400 = 8000(1+0.045)^(x)

Divide both sides of the equation by 8000; we have;

• 20400/8000= 1.045^(x)

• 2.55 = 1.045^(x)

Take log of both sides;

• x = 0.4065/0.0191

• x = 21.28 days.

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