Using an annual interest rate of 9%, how long will it take a deposit of $1,000 to grow to $3,000, assuming no additional deposits are made?
A)8.04 years
B)10.00 years
C)11.11 years
D)12.75 years
E)13.50 years

Question

Quizplus · Accepted Answer

Using the formula for compound interest, $ A = P(1 + r)^t $, where $ A $ is the amount, $ P $ is the principal, $ r $ is the annual interest rate, and $ t $ is the time in years, we solve for $ t $: $ 3000 = 1000(1 + 0.09)^t $. Simplifying gives $ 3 = (1.09)^t $. Taking the natural logarithm of both sides, $ \ln(3) = t \cdot \ln(1.09) $. Solving for $ t $ gives $ t \approx 12.75 $ years.

Using an Annual Interest Rate of 9%, How Long Will