A sum of $1200 is invested at an interest rate of
7 .5% compounded annually. How many years will it take until the sum exceeds $2600? (First find out when the amount equals $2600, then round off, assuming that the bank computes the compound interest only at the end of the year, so we must round the preliminary answer to the next year. For example, 9.3 years becomes 10 years.)

Question

A sum of $1200 is invested at an interest rate of 
7 .5% compounded annually. How many years will it take until the sum exceeds $2600? (First find out when the amount equals $2600, then round off, assuming that the bank computes the compound interest only at the end of the year, so we must round the preliminary answer to the next year. For example, 9.3 years becomes 10 years.)

anonymous · Answer

$$A=P(1+r)^{t}$$
2600=1200(1.075)^t
$$t \approx 10.69 or 11 years$$