Ask Question
20 December, 13:59

Tim has a savings account with the bank. The bank pays him 1% per year. He has $5,000 and wonders when it will reach $5,300. When will his savings reach $5,300? If necessary, round the answer to the nearest whole number.

Considering interest is calculated yearly, it will take Tim approximately ___ year (s).

+5
Answers (1)
  1. 20 December, 14:02
    0
    Assume interest is compounded at the end of each year, with a principal P over n years at interest i=0.01.

    Future value = 5300

    Then

    Future value

    = P (1+i) ^n

    =>

    5300=5000 ((1.01) ^n)

    Solve for n

    1.01^n=5300/5000=1.06

    n=1.06^ (1/6) = 5.856 years.

    If interest rate is 1% simple interest, then

    n = (1.06-1) /.01=6 years.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Tim has a savings account with the bank. The bank pays him 1% per year. He has $5,000 and wonders when it will reach $5,300. When will his ...” in 📗 Mathematics if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers