You currently have $3,500 invested at an annual rate of 8%.How long will it take for this investment to grow to a value of $5,000?
A)4.63 years
B)5.00 years
C)5.60 years
D)4.37 years

Question

Quizplus · Accepted Answer

We can use the formula for compound interest to solve this problem:

A = P(1 + r/n)^(nt)

Where:
A = final amount ($5,000)
P = initial amount ($3,500)
r = annual interest rate (8%)
n = number of times compounded per year (assuming annually, n = 1)
t = time (in years)

Plugging in the values, we get:

$5,000 = $3,500(1 + 0.08/1)^(1t)

Simplifying:

1.4286 = (1.08)^t

Taking the logarithm of both sides:

log(1.4286) = t log(1.08)

t = log(1.4286) / log(1.08)

t ≈ 4.63 years

Therefore, the best choice is A, 4.63 years.

You Currently Have $3,500 Invested at an Annual Rate of 8%.How