Question

Suppose you deposit $1,923.00 into an account today that earns 13.00%. It will take ___ years for the account to be worth $2,858.00.

Answer 1

Given present value of investement = 1923

Future value of investement is given by= Present value *(1+ interest rate)^number of years

Given Future value = 2858 and Interest rate = 13%

hence ,

2858= 1923*(1+13%)^number of years

2858/1923= 1.13^number of years

1.486219= 1.13^number of years

Or, log 1.486219= log(1.13^number of years)

Or, log 1.486219= number of years *log(1.13)

or Log 1.486219/Log 1.13= number of years

Or 0.1720828/0.0530784=number of years

Number of years = 3.242 years