SOLUTION: Ryan was 8 when his parents invested $4000 in a certificateof deposite that pays 6% for investments of 3 years. If Ryan leaves the account alone until it reaches $10,000, how old w

Question 40398: Ryan was 8 when his parents invested $4000 in a certificateof deposite that pays 6% for investments of 3 years. If Ryan leaves the account alone until it reaches $10,000, how old will he be? ---won't he be 20???
Answer by mbarugel(146) (Show Source): You can put this solution on YOUR website!
Hello!
The following rules applies for investmentes:
Future Value = Current Value*(1 + r)^n
where r is the interest rate in decimal form (in your case, 6% would be 0.06) and n is the number of periods over which interest is accrued. So we have to find out how many periods (years) it will take for $4,000 to become $10,000. So we solve the equation:

We have to isolate n. In order to do it, we take natural logarithm of both sides:

si it will take about 15.72 yeras for $4,000 to become $10,000 at a 6% interest rate. Since Ryan was 8 when the investment was made, he will be 23.72 years (almost 24) old when the acct reaches $10,000

I hope this helps!
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