SOLUTION: Anne deposits $2500 in an account that earns 7.5% annual interest compounded quarterly. Find out how long it will take for Anne to earn $500 in interest

Question 255702: Anne deposits $2500 in an account that earns 7.5% annual interest compounded quarterly. Find out how long it will take for Anne to earn $500 in interest
Answer by EMStelley(208) (Show Source): You can put this solution on YOUR website!
Remember that the formula for compound interest is:

In this problem, P = 2500, r = 0.075, n = 4 and t is our unknown. If Anne earns $500 in interest, then the total amount she has is A = 3000. So our problem is:

Our first step is to divide both sides by 2500.

Now, we need to get the exponent down since that is where the variable is. So we take the log of both sides:

Now we divide both sides by log(1.01875):

And last, we divide both sides by 4:

Using the calculator, we have that t = 2.45 years.
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