Question

Jenny puts aside $10,000 in an account that earns 3% annual interest, compounded monthly. How long will it take for the account to have $20,000? Round to the nearest whole number. Use the model A=P\left(1+\dfrac rn\right)^{nt}.

Answer 1

Based on the amount that Jenny sets aside and the interest being compounded, the length of time it will take to get to $20,000 is 23 months.

How long will it take for Jenny to get to $20,000?

First find the periodic interest:

= 3%/12

= 0.25%

The period can be found in the formula:

Future value = Amount saved x (1 + rate) ^ number of periods

In F = In Amount x In (1 + rate) ^ periods

Periods = In (F / Amount) / In (1 + rate)

Solving gives:
= In (20,000 / 10,000) ÷ In (1 + 0.25%)

= 277.605

Convert this to months:

= 277.605 / 12

= 23 months

#SPJ1

Find out more on finding length of time at https://brainly.com/question/15958436.