SOLUTION: A principal of $1300 is invested at 8.75% interest, compounded annually. How many years will it take to accumulate $4000 or more in the account?

Question 963867: A principal of
$1300
is invested at
8.75%
interest, compounded annually. How many years will it take to accumulate
$4000
or more in the account?
Answer by nerdybill(7384) (Show Source): You can put this solution on YOUR website!
A principal of
$1300
is invested at
8.75%
interest, compounded annually. How many years will it take to accumulate
$4000
or more in the account?
.
Use:
A = P(1+i)^t
where
A is amount after time t (4000)
P is principal (1300)
i is interest (.075)
t is time (years) -- this is what we're looking for
.
4000 = 1300(1+.075)^t
4000 = 1300(1.075)^t
40 = 13(1.075)^t
40/13 = (1.075)^t
= t
15.54 years = t
answer: approximately 16 years

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