Use the Compound Interest Formula to Determine How Long

question 92

Multiple Choice

Use the compound interest formula to determine how long it would take $2150 to grow to $6050 if the annual rate is 5% and interest is compounded monthly. Round your answer to the nearest tenth.

• A) 20.3 years
• B) 20.5 years
• C) 20.7 years
• D) 20.9 years

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, offering Limited liability to its shareholders, and having the ability to raise capital through issuing stock.

Non-profit

A non-profit organization is one that operates for a collective, public or social benefit, rather than to make money for its owners or investors.

Sole Proprietorship

A type of business structure owned and run by one individual where there is no legal distinction between the owner and the business.

Multiple Owners

A business structure where two or more individuals share ownership and responsibilities of managing the business.