.
Jimmy invests $19,000 in an account that pays 6.05% compounded quarterly.
How long (in years and months) will it take for his investment to reach $25,000?
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For the amount of $19000, compounded quarterly, the future value formula is
Future Value =
where n is the number of quarters.
Therefore, our equation to find "n" is
25000 =
Divide both sides by 19000
= ,
or
1.315789 = .
Take logarithm base 10 of both sides
log(1.315789) = n*log(1.015125)
and find "n" using your calculator
n = = 18.28 quarters.
Finally, round this value 18.28 to the nearest greater integer 19,
in order for the bank was in position to make the last compounding.
ANSWER. 19 quarters, or 19*3 = 57 months, or 4 years and 9 months.
Solved.
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To see many other similar (and different) solved problems, look into the lesson
- Problems on discretely compound accounts
in this site, and learn the subject from there.
After reading this lesson, you will tackle such problems on your own without asking for help from outside.
Also, you have this free of charge online textbook in ALGEBRA-I in this site
- ALGEBRA-I - YOUR ONLINE TEXTBOOK.
The referred lesson is the part of this online textbook under the topic "Logarithms".
Save the link to this online textbook together with its description
Free of charge online textbook in ALGEBRA-I
https://www.algebra.com/algebra/homework/quadratic/lessons/ALGEBRA-I-YOUR-ONLINE-TEXTBOOK.lesson
to your archive and use it when it is needed.
Happy learning (!)