Suppose you deposit $5,000 in a savings account that earns 3% annual interest. If you make no other withdrawals or deposits, how many years will it take the account balance to reach at least $6,000? A. 10 years. B. 6 years. C. 7 years. D. 4 years

Question

Selina Lamb

Mathematics

2 October, 11:06

Suppose you deposit $5,000 in a savings account that earns 3% annual interest. If you make no other withdrawals or deposits, how many years will it take the account balance to reach at least $6,000? A. 10 years. B. 6 years. C. 7 years. D. 4 years

+2

Answers (2)

Know the Answer?

Alexis Esparza · Answer 1

Taking into consideration that the interest is compound (yearly)

the amount of money gather through the years can be calculated by

A = P (1+r) ^ (t)

6000 = 5000 (1.03) ^t

t = ln (6000/5000) / ln (1.03) = 6.16 ≈ 7

c. 7 years

Ava Arias · Answer 2

You need to use the equation y=p (1+r) ^t where p = the principle (initial amount), r = the rate of decay or growth, and t = the time. So y=5,000 (1.03) ^x is the equation you'd want to use. At 6 years you'd have $5,970.3 and at 7 $6,149.40, so the answer is C.