$4,000 is invested in an account earning 6.5% interest compounded annually. How many years did it take to reach $5,000? A. 2 years B. 3 years C. 4 years D. 5 years
The formula is A=p (1+r)^t A future value 5000 P present value 4000 R interest rate 0.065 T time. ? 5000=4000 (1+0.065)^t Solve for t Divide both sides by 4000 5000/4000=1.065^t Take the log for both sides Log (5000/4000)=t×log (1.065) Divide both sides by log (1.065) T=log(5,000÷4,000)÷log(1.065) T=3.5 years round your answer to get 4 years
