SOLUTION: Jimmy invests $20,000 in a account that pays 4.24% compounded quarterly. How long( in years and months)will it take for his investment to reach 23,000

Question 525283: Jimmy invests $20,000 in a account that pays 4.24% compounded quarterly. How long( in years and months)will it take for his investment to reach 23,000
Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
Jimmy invests $20,000 in a account that pays 4.24% compounded quarterly. How long( in years and months)will it take for his investment to reach 23,000.
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Compound Interest Formula: A=P(1+i)^n, P=initial investment, i=interest rate per period, A=amount after n periods.
For given problem:
period=quarter
i=.0424/4=.0106
P=20000
A=23000
..
23000=20000(1+.0106)^n
23000/20000=(1.0106)^n
take log of both sides
log(23/20)=nlog(1.0106)
n=[log(23/20)]/log(1.0106)
using calculator
n≈13.25 quarters or 3 yrs and 4 months
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