Question

The value of a stock share in a new technology company has been increasing at a rate of 8.6% quarterly. The initial price of one share was $102.15. An investor plans to sell once the value of one share reaches $233.10. If t is the number of quarters since the initial price of one share was set, which equation could be used to determine how long it will take the share to reach $233.10, assuming it continues to grow at the same rate?

Answer 1

Rate of interest = 8.6% or 0.086

The initial price of one share was $102.15. An investor plans to sell once the value of one share reaches $233.10.

If t is the number of quarters since the initial price of one share was set, then the equation that could be used to determine how long it will take the share to reach $233.10 is : 233.10 = 102.15(1.086)^t