Question

A person invests 7000 dollars in a bank. The bank pays 5.5% interest compounded monthly. To the nearest tenth of a year, how long must the person leave the money in the bank until it reaches 13200 dollars?

Answer 1

The number of years it will take the person to leave the money in the bank until it reaches 13200 dollars is 2.9 years.

To calculate the time the person must leave the money in the bank until the money reaches 13200 dollars, we use the formula of compound interest below.

What is compound interest?

This is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Formula:

• A = P(1 + r/100)ⁿ................ Equation 1

Where:

• A = Amount

• P = Principle

• r = Rate

• n = Time.

From the question,

Given:

• P = 7000 dollars

• r = 5.5%  componded monthly

• A = 13200 dollars

Substitute these values into equation 1 and solve for n

• 13200 = 7000(1+(5.5×12)/100)ⁿ

• (1+(5.5×12)/100)ⁿ = 13200/7000

• (  1.66)ⁿ = 1.886

• n = 2.9 years

Hence, The number of years it will take the person to leave the money in the bank until it reaches 13200 dollars is 2.9 years.

Learn more about compound interest here: brainly.com/question/18456266