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of 10: Your laptop died and you need a new one for work NOW! The one you need will cost $500. You do not...

QUESTION 6 of 10: Your laptop died and you need a new one for work NOW! The one you need will cost $500. You do not have the cash in your checking account, so you decide to borrow the money from your savings account. You have $9,000 in your savings account, gaining 3% interest per year. If you don't replace the $500 in the savings account, how long will it take before the balance again reaches $9,000?
a) 1 year
b) 2 years
c) 5 years

Answer

Answer: b) 2 years

Explanation: The savings account earns 3% interest per year. After withdrawing $500, the balance is $8,500. To find out how long it will take to reach $9,000 again, we calculate the time required for $8,500 to grow to $9,000 at 3% interest per year.

Using the formula for compound interest: A = P(1 + r)^t, where A is the amount, P is the principal, r is the rate, and t is the time in years:

9000 = 8500(1 + 0.03)^t

1.0588 ≈ (1.03)^t

t ≈ 2 years

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