Question

Jed deposited $400 into a bank that offers 3.9% interest rate, compounded daily. In how many years will his balance be $800?

Answer 1

17.7 years----------->Apex correct answer

Answer 2

Answer:

18 years ( approx )

Step-by-step explanation:

Since, if an amount is compounded daily,

Then, the final amount after t years is,

$A=P(1+\frac{r}{365})^{365t}$

Where, P is the principal amount

r is the annual rate ( in decimals ),

t is the number of years,

Given,

A = $ 800,

r = 3.9% = 0.039,

P = $ 400,

By substituting the values,

$800=400(1+\frac{0.039}{365})^{365t}$

$\implies t = 17.774\approx 18\text{ years}$

Hence, his balance will be $800 after approximately 18 years.