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15 September, 11:27

Terri invested $1500 in an account with an interest rate of 2.25% compounded continuously. How long will it take for Teri's account to earn $5000

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  1. 15 September, 14:38
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    53.51 years

    Step-by-step explanation:

    FV = PV e⁽ⁿˣ⁾

    FV = Future Value = $5000

    PV = Present Value = $1500

    n = Interest Rate = 2.25%

    x = time in years = ?

    e = mathematical constant = 2.7183

    So,

    5000 = 1500 e⁽⁰°⁰⁰²⁵ˣ⁾

    50 / 15 = e⁽⁰°⁰⁰²⁵ˣ⁾

    ㏑ (3.3333) = 0.0225x ㏑ (2.7183)

    1.2040 = 0.0225x

    x = 53.51 year

    So, If compounded continuously at an APR of 2.25% the amount invested in an account of $1500 will accumulate to $5000 in 53.51 years.
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