Question

After how many years, to the nearest whole year, will an investment of $100,000 compounded quarterly at 4% be worth

Answer 1

9514 1404 393

Answer:

  19 years

Step-by-step explanation:

The compound interest formula tells you the future value of principal P invested at annual rate r compounded n times per year for t years is ...

  A = P(1 +r/n)^(nt)

Solving for t, we get ...

  t = log(A/P)/(n·log(1 +r/n))

Using the given values, we find t to be ...

  t = log(2.13022)/(4·log(1 +0.04/4)) ≈ 19.000

The investment will be worth $213,022 after 19 years.