You invest $1000 today at j₁₂ = 6%.After 2 years,the interest rate changes to j₁₂ = 12%.How many years from today will it take the $1000 to grow to $10,000?

Question

Quizplus · Accepted Answer

The investment grows at 6% for the first 2 years and then at 12% thereafter. To find the total time to grow to $10,000, we first calculate the amount after 2 years with a 6% growth rate: $1000 * (1 + 0.06)^2 = $1123.60. Then, we solve for t in $1123.60 * (1 + 0.12)^t = $10,000. Rearranging, we get (1 + 0.12)^t = $10,000 / $1123.60, and solving for t gives t ≈ 18.28 years. Adding the initial 2 years, the total time is 20.28 years.

You Invest $1000 Today at J12 = 6

You Invest $1000 Today at J₁₂ = 6