How many years will it take $200 to grow to $250 with an annual interest rate of 4 percent?
A) 1.24 years
B) 5.69 years
C) 6.25 years
D) 18.00 years

Question

Quizplus · Accepted Answer

The formula to calculate the number of years required for an investment to grow to a certain amount with compound interest is $ t = \frac{\log(\frac{FV}{PV})}{\log(1 + r)} $, where $ t $ is the time in years, $ FV $ is the future value, $ PV $ is the present value, and $ r $ is the annual interest rate (in decimal form). Plugging in the values: $ t = \frac{\log(\frac{250}{200})}{\log(1 + 0.04)} = \frac{\log(1.25)}{\log(1.04)} \approx 5.69 $ years.

How Many Years Will It Take $200 to Grow to $250