A man deposited $1000 into a savings account seven years ago. The account earns interest at 4% per annum effective. Today he withdraws half of the money in the accounts. In how many years from now will the remaining funds first exceed $1000 again?

• 10.7
• 11
• 11.25
• 11.7
• 12

References

Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.

Solution: A

[math]1000=(1 / 2) 1000(1.04)^7(1.04)^n[/math] so [math]2=(1.04)^{7+n}[/math] so [math](7+n) \ln (1.04)=\ln 2[/math] so [math]n=-7+\ln 2 / \ln (1.04)=[/math] 10.673 years.

References

Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.