Jerry Stevens wants to know how long it will take $1,100 to amount to $1,750 at a simple interest rate of 8 1/2%. Could you help Jerry? Round time in years to the nearest tenth.
To solve the question we use the compound interest formula given by: FV=P(1+r/100)ⁿ where: FV=future value P=principle r=rate n=time thus plugging our values in the formula we obtain: 1750=1000(1+8.5/100)ⁿ simplifying and solving for n we obtain: 1.750=1.085ⁿ n=ln 1.750/ ln 1.085 n=6.86~6.9 years
