Compound Interest Calculation: How Long to Reach $26,500 from $14,050?
QUESTION
How long does it take for $14,050 to grow to $26,500, if interest rates are set at 15.96%?
ANSWER
It takes approximately 4.54 years for $14,050 to grow to $26,500 with an interest rate of 15.96%.
To calculate the time it takes for an amount to grow to a certain value with a given interest rate, we can use the formula for compound interest:
Final Value = Principal * (1 + Interest Rate)^Time
Given:
Principal = $14,050
Final value = $26,500
Interest Rate = 15.96% (convert to decimal: 0.1596)
Time = ?
Using the formula and the given values:
$26,500 = $14,050 * (1 + 0.1596)^Time
After calculations to isolate Time:
Time ≈ 4.54 years
Therefore, it takes approximately 4.54 years for $14,050 to grow to $26,500 with an interest rate of 15.96%.