5. How long will it take $5,000 to become $8,000 when the $5,000 grows at 9.5...

5. How long will it take $5,000 to become $8,000 when the $5,000 grows at 9.5 percent per year?

Group of answer choices

A. 6.26 years

B. 6.11 years

C. 5.18 years

D. 5.79 years

E. 5.35 years

Expert Solution

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

8000=5000*(1.095)^n

(8000/5000)=(1.095)^n

Taking log on both sides;

log (8000/5000)=n*log 1.095

n=log (8000/5000)/log 1.095

=5.18 years(Approx)

jeff jeffy answered 2 years ago

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