How long will it take for a $1,000 investment to grow to $3,000 if the interest rate per year is 8%, and interest is paid only at the end of each year?
A)13 years
B)15 years
C)14 years
D)12 years

Question

Quizplus · Accepted Answer

To find out how long it will take for a $1,000 investment to grow to $3,000 with an annual interest rate of 8%, we can use the formula for compound interest, which is A = P(1 + r)^t, where A is the amount of money accumulated after n years, including interest, P is the principal amount ($1,000), r is the annual interest rate (8% or 0.08), and t is the time the money is invested for in years. We need to solve for t when A is $3,000, P is $1,000, and r is 0.08.$3,000 = $1,000(1 + 0.08)^t3 = (1.08)^tTo solve for t, we take the logarithm of both sides:log(3) = t * log(1.08)t = log(3) / log(1.08)t ≈ 14.897Since t represents the number of years and it must be a whole number, we round up to the nearest whole year, which gives us 15 years.

How Long Will It Take for a $1,000 Investment to Grow