Solve the problem.
-How long must $4700 be in a bank at 6% compounded annually to become $7067.06? (Round to the nearest year.)
A) 9 yr
B) 6 yr
C) 8 yr
D) 7 yr

Question

Quizplus · Accepted Answer

The formula for compound interest is $A = P(1 + r)^n$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), and $n$ is the number of years the money is deposited or borrowed for. Plugging in the given values: $7067.06 = 4700(1 + 0.06)^n$. Solving for $n$, we find $n \approx 7$ years.

Solve the Problem. -How Long Must $4700 Be in a Bank at 6