Question

(1 pt) Cicely invests 3600 dollars in an account paying an
effective rate of interest of 5 percent. Two years later, she
deposits an additional 1650 dollars. If there are no other
transactions, how long will it take (from the time of the first
investment) for her account balance to reach 8600 dollars? (Assume
simple interest between compoundings.)

Answer = (blank) years and (blank) days.

(Note: your answer for the number of years should be a whole
number, while your answer for the number of days should be given to
at least 3 decimal places.)

Can use excel as long as answer is correct

Answer #1

Future value = Present value*(1+r)^n

where n = number of years

r = rate of return

after 2 years amount = 3600*(1.05)^2

= 3969

after 2 years she deposits additional 1650

total amount after 2 years = 3969+1650 = 5619

8600 = 5619*(1+5%)^n

(1.05)^n = 1.5302

by applying log on both sides

n log(1.05) = log(1.5302)

n = log(1.5302) / log(1.05)

n = 8.723244 years

total = 8.723244+2 = 10.723244 years

1 year = 365 days

0.723244 years = 0.723244*365 = 263.984days

**Answer = 10 Years
and 263.984 days**

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