SOLUTION: You deposit $2000 in an account that pays 2% annual interest compounded quarterly. How long will it take for the balance to reach $2400? How do you set up the equation and rules f

Question 392392: You deposit $2000 in an account that pays 2% annual interest compounded quarterly. How long will it take for the balance to reach $2400?
How do you set up the equation and rules for solving please
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
You deposit $2000 in an account that pays 2% annual interest compounded quarterly. How long will it take for the balance to reach $2400?
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A(t) = P(1+(r/n))^(nt)
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2400 = 2000(1+(0.02/2))^(2t)
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1.2 = (1+0.01)^(2t)
Take the log:
(2t)log(1.01) = log(1.2)
2t = 18.32
t = 9.165 years
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Cheers,
Stan H.
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