Question

Find the time required for an investment of 5000 dollars to grow to 6400 dollars at an interest rate of 7.5 percent per year, compounded quarterly. Your answer is t = _____

Answer 1

Answer:

t= 3.322 years

Step-by-step explanation:

investment made= $5000 (Principal)

amount obtained after a specific time= $6400

rate %= 7.5% per year compounded quarterly which means

r= 7.5/(100*4)= 0.01875

time = 4t ( compounded quarterly)

we know that Amount obtained is given by

$A= P(1+r)^{4t}$

$6400= 5000(1+0.01875)^{4t}$

$(1.01875)^{4t}=1.28$

taking log on both sides and solving we get

t= 3.322 years

hence my answer t= 3.322 years