Question

How many years will it take for $136,000 to grow to be $468,000 if it is invested in an account with an

annual interest rate of 8%?

Answer 1

We use the formula:

 

A=P(1+r/100)^n

 

where

 

A=future value

 

P=present value

 

r=rate of interest

 

n=time period.468,000=136,000*(1.08)^n

 

(468,000/136,000)=(1.08)^nTaking log on both sides;

 

log (468,000/136,000)=n*log 1.08

 

n=log (468,000/136,000)/log 1.08

 

=16.06 years(Approx).

It will take approx. 16.06 years.