Question

You have saved $10,000 toward a down payment on a home. The money is invested in an account earning 7% interest. You will be ready to purchase the new home once your savings account grows to $25,000. Approximately how many years will it take for the account to reach $25,000?

Answer 1

Answer:

Number of year = 14 years (approx)

Explanation:

Given:

Present amount = $10,000

Rate of interest = 7% = 7 / 100 = 0.07

Number of year = ?

Amount = $25,000

Computation of Total year to get given amount:

$Amount = Present\ amount(1+r)^n\\\\25,000= 10,000(1+0.07)^n\\\\2.5 = (1.07)^n\\n=13.544$

Number of year = 13.5444

Number of year = 14 years (approx)