Given:
Principal value = $65,550
Rate of interest = 3% compounded every six month
To find:
The taken to have $100,000 in Jack's account.
Solution:
The formula for amount is
[tex]A=P(1+\dfrac{r}{n})^{nt}[/tex]
where, P is principal, r is rate of interest, n is number of times interest compounded in an year, t is time in number of years.
Interest compounded every six month. It means, interest compounded 2 times in an year.
Substitute A=100000, r=0.03 and n=2 in the above formula.
[tex]100000=65550(1+\dfrac{0.03}{2})^{2t}[/tex]
[tex]\dfrac{100000}{65550}=(1+0.015)^{2t}[/tex]
[tex]1.525553=(1.015)^{2t}[/tex]
Taking log on both sides.
[tex]\log (1.525553)=\log (1.015)^{2t}[/tex]
[tex]\log (1.525553)=2t\log (1.015)[/tex]
[tex]\dfrac{\log (1.525553)}{2\log (1.015)}=t[/tex]
[tex]t=14.1838928[/tex]
[tex]t\approx 14.18[/tex]
Therefore, after 14.18 year the amount will reach at $100,000 or we can say that in 15th year the amount will reach at $100,000.
