Answer: 12.6 years
Step-by-step explanation:
Hi, to answer this question we have to apply the compounded interest formula:
A = P (1 + r/n) nt
Where:
A = Future value of investment (principal + interest)
P = Principal Amount
r = Nominal Interest Rate (decimal form, 4/100= 0.04)
n= number of compounding periods in each year (1)
t = years
Replacing with the values given
8200= 5000(1+ 0.04/1)^1(t)
Solving for t
8200 =5000 (1.04)^t
8200/5000 =(1.04)^t
1.64 =(1.04)^t
log 1.64 =log (1.04)^t
log 1.64 = t log (1.04)
log 1.64/ log (1.04) =t
t = 12.6 years
