Question

Mr. B will deposit the bank, which saves 10000 TL, and the future value of this money is 18106 TL. Since it is known that the bank's annual interest will be 16%, how long is Mr. B deposited into the bank to start this amount?

Answer 1

Case 1

If Interest is Simple Interest

Simple Interest = Amount - Principal

= 18106 - 10000 = 8106

Simple Interest = (Principal * Rate * Time ) / 100

8106 * 100 = 10000 * 16 * T

T = 810600 / 160000

T = 5.06 = 5 years.

Time wiil be 5 years.

Case 2 If Interest is Compound Interest

Future Value= Present Value ( 1 + r/100) ^n

18106 = 10000 ( 1 + 0.16 ) ^n

(18106 / 10000) = 1.16^n

1.8106 = 1.16 ^n

Taking log on both sides

Log 1.8106 = n Log 1.16

0.2578 = n * 0.06445

n = 0.4 years = 4.8 months.