If Rachel invests $1700 today in an account that pays 6 percent interest compounded annually, how long will it take for her to accumulate $6,500 in her account?
A)23.02 years
B)18.50 years
C)20.52 years
D)16.89 years
E)25.65 years

Question

Quizplus · Accepted Answer

The correct answer is A because it takes 23.02 years for Rachel to accumulate $6,500 in her account. The formula for compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (initial investment), r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years. In this case, P = $1700, r = 6%, n = 1 (compounded annually), and A = $6,500. Solving for t, we get t = log(A/P) / (n * log(1 + r/n)) = 23.02 years.

If Rachel Invests $1700 Today in an Account That Pays