Question

Randy wants to move his savings account to a new bank that pays a better interest rate of 3.5% so that he can earn $100 in interest faster than at his old bank. If he moves $800 to the new bank, how long will it take for him to earn the $100 in interest?

Answer 1

depends on how the interest is calculated, compounded so many times a year

Answer 2

assuming simple interest is not a real life application, but may be plausible for the question

Answer 3

800(1+r/n)^(nt) = 900 if compounded n times a period

Answer 4

so I just do that?

Answer 5

i would ..... bu tthe question is ambiguous since we dont know what sort of interest or compounding factor we have to work with

Answer 6

we can clove for t, but it will be in terms of n; or if simple interest

100 = 800rt, and solving for t is pretty easy

but we know nothing about the type of interest to determine which method they desire

Answer 7

**we can solve for t ....

Answer 8

Oh ok

Answer 9

P(1+r/n)^(nt) = A

(1+r/n)^(nt) = A/P

nt log(1+r/n) = log(A/P)

t = log(A/P) / [n log(1+r/n)]

so if n=1, 4, 12, etc .. we can determine a time value for it using compound interest

Answer 10

I found it it's supposed to be simple

Answer 11

simple is much simpler then :)

100 = 800(.035)t divide off the excess

Answer 12

ok

Answer 13

thank you