Question

Alison deposits $ 500 into a new savings account that earns 5 percent interest compounded annually. if alison makes no additional deposits or withdrawals, how many years will it take for the amount in the account to double? select an answer a 14 correct answer: b 15 c 19 d

Answer 1

Heya mate,
here is your answer,
______________

The amount deposited by Alison = $500

Rate of interest = 5% p. a.

According to the question, we can form the following equation:

A = P(1+r/100)^n

1000 = 500 (1+5/100)^n

2 = (21/20)^n

2 = (1.05)^n

(1.05)^14 = 1.97 (2 approx )



Hence, n = 14.

Thus, in 14 yrs, the amount will be doubled.

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