Type the correct answer in the box. Use numerals instead of words. If necessary, use / for the fraction bar. David invested $230 in a savings account that offers a 3% return on the investment. The value of David's investment will be at least $415 after a period of years. Hint: Use the formula A = P(1 + r)t, where A is the amount after t years, P is the amount invested, r is the rate of interest, and t is the time period. Use a calculator to compute the answer, and round it off to the nearest year.

Respuesta :

The value of David's investment will be at least $415 after a period of 20 years

Compound interest

The formula for calculating the compound interest is expressed as:

A = p(1+r)^t

Given the following parameters

  • A = $415
  • P = $230
  • r = 3% = 0.03

Substitute

415 = 230(1+0.03)^t
415/230 = 1.03^t
1.8043 = 1.03^t
t = ln(1.8043)/ln1.03

t = 20 years

The value of David's investment will be at least $415 after a period of 20 years

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