Gabriel invested 17,000 in an account paying an interest rate of 3% compounded annually. Assuming no deposits or withdrawals are made, how long would it take, to the nearest tenth of a year, for the value of the account to reach 26,600?

Solution

G ab r i e l in v es t e d 17, 000 in an a cco u n t p a y in g an in t eres t r a t e o f 3% co m p o u n d e d ann u a ll y . A ss u min g n o d e p os i t s or w i t h d r a w a l s a re ma d e, h o w l o n g w o u l d i t t ak e, t o t h e n e a res t t e n t h o f a ye a r, f or t h e v a l u e o f t h e a cco u n t t o re a c h 26, 600 ?

Time : 15.15

Solution steps

Translate the problem into an equation:

26600 = 17000 (1 + \frac{0.03}{1})^{1 \cdot t}

Solve for

t, 26600 = 17000 (1 + \frac{0.03}{1})^{1 \cdot t} : t = 15.15

Time : 15.15