A person invests 5500 dollars in a bank. The bank pays 4.25% interest compounded annually. To the nearest tenth of a year, how long must the person leave the money in the bank until it reaches 11200 dollars?

Solution

A p erso n in v es t s 5500 d o ll a rs in a bank . T h e bank p a ys 4.25% in t eres t co m p o u n d e d ann u a ll y . T o t h e n e a res t t e n t h o f a ye a r, h o w l o n g m u s t t h e p erso n l e a v e t h e m o n ey in t h e bank u n t i l i t re a c h es 11200 d o ll a rs ?

Time : 17.09

Solution steps

Translate the problem into an equation:

11200 = 5500 (1 + \frac{0.0425}{1})^{1 \cdot t}

Solve for

t, 11200 = 5500 (1 + \frac{0.0425}{1})^{1 \cdot t} : t = 17.09

Time : 17.09