900.00 deposit in the bank earning 3% interest how long will it take to earn $135.00 dollars?

1 Answer
Aug 6, 2018

#color(maroon)("It will take 5 years to earn $ 135 with Simple Interest"#

#color(chocolate)("It will take 4.73 years to earn $ 135 with Compound Interest"#

Explanation:

Case : 1 - Assuming it to be simple interest

#I = (P N R) / 100#

#I = $ 135, P = $ 900, R = 3%, N = ?#

#N = (100 * I ) / ( P * R) = (100 * 135) / (900 * 3) = 5 years#

Case : 2 - Assuming it to be Compound Interest.

#P + I = P (1 + R/100)^N#

#900 + 135 = 900 (1 + 3/100)^N#

#1.03^N = 1035 / 900 = 23/20 = 1.15#

#N log 1.03 = log 1.153

#N = log 1.15 / log 1.03 ~~ 4.73 years#