Question

PLS HELP

SET UP THE EQUATION NEEDED TO SOLVE:

You place $700 in a bank to be compounded quarterly at 5%. How long will it take for the account to be worth $1500 if no additional
money is added?

A 1500 = 700 (1 + .05/4) ^4x
B 1500 = 700 (1 + .05/4) ^x
C 1500 = 700 (1 + 5/4) ^4x
D 1500 = 700 (1 + .05) ^4x

Answer 1

A

Explanation:

Compound Interest Formula :

• A = P (1 + r/n)^(nt)
• A = amount with interest
• P = Principal amount
• r = rate (in decimal)
• n = amount of times compounded
• t = number of years

Here, we are given :

• P = 700
• r = 5% = 0.05
• n = 4 (quarterly means 4 times a year)
• A = 1500

Substituting the given values and taking x in place of t :

• 1500 = 700(1 + .05/4)^4x
• Option A