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Popular Word Problems >

Edward deposited 2,000.00 into a new savings account that earns 15% interest compounded monthly. How long will it take for the balance to grow to 6,961.00?Round your answer to the nearest month.

Solution

E d w a r d d e p os i t e d 2, 000.00 in t o a n e w s a v in g s a cco u n t t ha t e a r n s 15% in t eres t co m p o u n d e d m o n t h l y . Ho w l o n g w i ll i t t ak e f or t h e ba l an ce t o g ro w t o 6, 961.00 ? R o u n d yo u r an s w er t o t h e n e a res t m o n t h .

Solution

Time : 8.37

Solution steps

Translate the problem into an equation:

6961 = 2000 (1 + \frac{0.15}{12})^{12 t}

Solve for

t, 6961 = 2000 (1 + \frac{0.15}{12})^{12 t} : t = 8.37

Time : 8.37

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