Tim has a savings account with the bank. The bank pays him 5% per year. He has $5,900 and wonders when it will reach $6,500. When will his savings reach $6,500? If necessary, round your answer to the nearest whole number. Consider interest is calculated yearly, it will take Tim approximately ? Year(s).

If interest is calculated yearly, it will take Tim approximately 6 years

Step-by-step explanation:

For interest compounded continuously we use this formula

A = pe^rt

Where A = Amount in future ($5,300)

          P = Principal amount  ($5,000)

           r = interest rate (1% or 0.01)

           t = time

Now we put the values

5300 = 5000e(0.01)t

1.06 = Ve(0.01)t

㏑1.06 = 0.01t

t = ㏑(2) ÷ 0.01

t = 5.82 years rounded to 6 years

If interest is calculated yearly (simple interest)

n = ( 1.06-1 ) / 0.01 = 6 years.

If interest is calculated yearly, it will take Tim approximately 6 years.

Source:

∈3,600

step-by-step explanation: