Adrian invested $7,200 in an account paying an interest rate of 3.1% compounded monthly. It takes 17 year for the value of the account to reach $12,110.
Compound interest is a method of calculating the interest charge. In other words, it is the addition of interest on interest.
Compound Interest =P(1+r/n)^rt
Adrian invested $7,200 in an account paying an interest rate of 3.1% compounded monthly. for the value of the account to reach $12,110 we need to find the time it takes.
The principal amount = $7,200
Rate = 3.1%
Compound Interest = [tex]P(1+r/n)^{rt}[/tex]
12,110 = [tex]7200(1+3.1/12)^{3.1t}[/tex]
t = 17
Thus, for the value of the account to reach $12,110 the time taken is 17.
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