If you invest $1500 at a rate of 7% per year, how many years will it take to earn at least $1050 in interest?

1 Answer
Apr 24, 2018

8

Explanation:

The formula is compound interest rate:
P(1+ r/n)^(n*t) = A
P is Principal amount;
r is interest rate;
n is number of compounds per year/months and etc.
t is time in years/months and etc.
A is last Amount

So
1500*(1+0.07/365)^(365*t)=(1500+1050)

1500*(1+0.07/365)^(365*t)=2550

It is hard to calculate. That is why you can apply for Google. There is the compound interest rate calculator on the web.

As a result, the answer or t is 8
It means that you have to wait for 8 years in order to earn at least extra $1050.