Engineering Board Exam Reviewer · Compound Interest · hard
P8,000 is invested at 10% compounded annually and P12,000 at 6% compounded annually. After how many years will the two investments have equal values?
- 8 years
- 12.5 years
- 10 years
- 10.95 years
Answer
D. 10.95 years
Solution
Set 8,000(1.10)n=12,000(1.06)n ≤ft(1.10/1.06 )n=1.5. So n= 1.5/ (1.10/1.06)=10.95 years.
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