Ryan was 8 when his parents invested $4000 in a certificate of deposit that pays 6%. If Ryan leaves the account alone until it reaches $10,000, how old will he be?

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Answer 1 · 2017-10-22T14:17:19

about $24$

Compund Interest Formula :

$"Amount"="Principle"*(1+"Rate")^"Time"$

Here,

$$10000=$4000 *(1+6%)^"t"$

$=($10000)/($4000)= *(1+0.6)^"t"$

$=2.5=1.06^t$

Take log of both sides:

$log(1.06^x)=log(2.5)$

$=x*log(1.06)=log(2.5)$

$=x=log(2.5)/log(1.06)$

$=x~~15.73$

$therefore$ Ryan will be $8+15.73~~24$ years old then.