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