Question

2)If a $100 deposit is made at a bank that pays 12% per year, compounded annually, determine how long it will take for the investment to reach $2000.

Answer 1

Answer:

It will take 26.4 years for investment to reach $2000

Step-by-step explanation:

2000=100(1+.12)^x

20=1.12^x

㏒_{20} 1.12=x

log 1.12/ log 20=x

x= 26.434

Answer 2

The number of years that should be taken for reaching $2,000 is 26.40 years.

Given that,

• The deposit made at the bank is $100.
• The interest rate per year is 12%.
• And, the reaching amount is $2,000.

Based on the above information, the calculation is as follows:

$2000=100(1+.12)^x\\\\20 = 1.12^x$

Now apply log to both sides

$\frac{log1.12}{log20} = x$

x = 26.4 years

Therefore we can conclude that the number of years that should be taken for reaching $2,000 is 26.40 years.

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