Question

Crystal invested $10,530 into an account that earns 3.74% interest compounded monthly. How long will it take (in years and days) to accumulate to $17,040. Round up the value of N to the next higher whole number (e.g. N = 5.31 rounds up to N = 6), similarly days are rounded up to the next days. If years is a whole number, you must enter a zero for days for the answer to be marked as correct. All answer boxes must have an entry!

Answer 1

Here

Principal (P)= $10,530

Amount (A)= $17,040

r = 3.74% compounded monthly

n = 12

So the formula to calculate time (t) is given by

t = [ ln(A) - ln(P) ] / n[ln(1 + r/n)]

= [ ln(17040) - ln(10530) ] / 12[ln(1 + 0.0374/12)]

  = [ 9.7433 – 9.2620 ] / 12[0.0031]

   = 0.4813/0.0372

    = 12.88997

total time = 12.9382 years = 12 years and 325 days

So Time taken will be 12 years and 325 days