EllieB1015 said:
I forgot the formula to use for this problem: If $2300 is invested at 6% interest compounded annually, how long will it take to reach $4150? Could someone please help? I need it for my graphing calculator. Thanks!
Here's the basic formula for compound interest, where F is the final amount, P = amount invested, r= interest rate expressed as a decimal, n = number of compounding periods in a year, and t = number of years:
F = P * (1 + (r / n)] ^(nt)
Ok...the amount invested is $2300, so that's P.
The interest rate is 6%. 6% expressed as a decimal is 0.06.
If the interest is compounded ANNUALLY, there is just ONE compounding period per year, so n = 1.
And t is the number of years....we don't know that.
We DO, however, know that the final amount, F, is to be 4150
Substitute all of these values into the formula:
4150 = 2300 * (1 + (0.06/1)] ^ (1*t)
4150 = 2300 * (1 + .06)^t
4150 = 2300 * (1.06)^t
Divide both sides by 2300.....
4150/2300 = (1.06)^t
Think "logs"....
