With an interest rate of 4% per year and compounded once per year, it will take 18 years to accumulate a total of $40,500.00 with compounded interest on a principal of $20,000.00.In order to compute compound interest, multiply the principle of the original loan by the annual interest rate multiplied by the number of compound periods minus one
To begin, change R from a percentage to a decimal: R/100 r = 4/100 r = 0.04 each year.
the equation t = ln(A/P) / n[ln(1 + r/n)] must then be solved.
t = ln(40,500.00/20,000.00) / (1 × [ln(1 + 0.04/1)])
t = ln(40,500.00/20,000.00) / (1 × [ln(1 + 0.04)])
t equals 17,99 years
With an interest rate of 4% per year and compounded once per year, it will take 17.99 years to accumulate a total of $40,500.00 with compounded interest on a principal of $20,000.00.about 18 years.
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