Question

Joseph invested $6,700 in an account paying an interest rate of 5.2% compounded quarterly. Assuming no deposits or withdrawals are made, how long would it take, to the nearest year, for the value of the account to reach $13,950?

Answer 1

14

Explanation:

Answer 2

Explanation:

A=P(1+r/c)^(ct), where a is final value, P is the initial value or principle, r is the interest rate, and c is the number of compounding periods in a year.

ln(A/P)/ln(1+r/c)=ct so

t =(ln(A/P)/(cln(1+r/c)), given A=13950, P=6700, r=0.052, c=4

t=(ln(13950/6700))/(4ln(1.013))

t=14 years