Ethan has £50,000 to invest today at an annual interest rate of 4%. Approximately how many years will it take before the investment grows to £101,250?

Question

Quizplus · Accepted Answer

The correct answer is A because the investment will grow to £101,250 in approximately 18 years. This can be calculated using the formula A = P(1 + r/n)^(nt), where A is the future value, P is the present value, r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years. In this case, P = £50,000, r = 4%, n = 1 (since the interest is compounded annually), and A = £101,250. Solving for t gives t = 18.02 years.

Ethan Has £50,000 to Invest Today at an Annual Interest