SOLUTION: you deposit $2000 in an account that pays 6% annual interest, compounded quarterly. How long will it take for the balance to reach $2500

Question 882252: you deposit $2000 in an account that pays 6% annual interest, compounded quarterly. How long will it take for the balance to reach $2500
Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
you deposit $2000 in an account that pays 6% annual interest, compounded quarterly. How long will it take for the balance to reach $2500
***
compound Interest Formula: A=P(1+i)^n, P=initial investment, i=interest rate per compounding period, n=number of compounding periods, A=amount after n-compounding periods.
For given problem:
P=$2000
i=.06/4=0.015
n=?
A=$2500
..
2500=2000(1+.015)^n
2500/2000=1.015^n
1.25=1.105^n
log(1.25)=nlog(1.015)
n=log(1.25)/log(1.015)≈15
15 compounding periods=15/4=3yrs and 3 months
How long will it take for the balance to reach $2500? 3yrs and 3 months
RELATED QUESTIONS
You deposit $2000 in an account that pays 2% annual interest compounded quarterly. How... (answered by stanbon)

you deposit $2000 in an account that pays 2% annual interest compounded quarterly. How... (answered by stanbon,Edwin McCravy)

You deposit $500 in an account that pays 2.5% annual interest compounded continuously.... (answered by ewatrrr)

You deposit $2,500 into an account that pays 3.5% annual interest compounded daily. How... (answered by Boreal)

you deposit $3000 in an account that pays 6% annual interest. find the balance after 2... (answered by palanisamy)

You deposit Php 2500 into an account that pays 3.5% annual interest compounded daily. How (answered by ikleyn)

My homework problem states "You deposit $2000 into an account that pays for 2% annual... (answered by stanbon)

Suppose you deposit money in an ivestment account that pays 9% annual interest compounded (answered by robertb)

suppose you deposit money in an investment account that pays 7% annual interest... (answered by scott8148)