Question

Zoe invest $600 in college savings account. The account earns 5.7% interest compounded quarterly. How many years will it take for Zoe's account to reach $7,000?

Answer 1

Answer:

43.407 years

Step-by-step explanation:

Zoe invest $600 in college savings account. The account earns 5.7% interest compounded quarterly. How many years will it take for Zoe's account to reach $7,000?

We are asked to find time t in a compound interest formula

The formula is given as:

t = log(A/P) / n[log(1 + r/n)]

A = Total amount = $7000

P = Principal = $600

n = number of times interest is compounded = Quarterly =4

r = Interest rate = 5.7% = 0.057

Hence,

t = log(7000/600) /4[log (1 + 0.057/4)]

t = 43.407 years