Algebra.Com's Answer #270480 by Edwin McCravy(20063)  You can put this solution on YOUR website! 3. How long, to the nearest tenth of a year, will it take $12,500 to grow to $20,000 at 6.5% annual interest compounded quarterly? (Use the formula for compound interest with n compoundings per year to solve for t.) \n" );
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document.write( "A = final amount = 20000\r\n" );
document.write( "P = beginning amount = 12500\r\n" );
document.write( "r = annual interest rate expressed as a decimal = .065\r\n" );
document.write( "n = number of times a year the interest is compounded = 4 (quarterly)\r\n" );
document.write( "t = number of years it takes P to grow to A = what we want to find\r\n" );
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document.write( "Take the log of both sides:\r\n" );
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document.write( "Use this rule of logs: \r\n" );
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document.write( "Subtract from both sides:\r\n" );
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document.write( "Divide both sides by \r\n" );
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document.write( "Cancel:\r\n" );
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document.write( "Now substitute\r\n" );
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document.write( "A = final amount = 20000\r\n" );
document.write( "P = beginning amount = 12500\r\n" );
document.write( "r = annual interest rate expressed as a decimal = .065\r\n" );
document.write( "n = number of times a year the interest is compounded = 4 (quarterly)\r\n" );
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document.write( "That's over 7 years. To find out how many months, multiply the\r\n" );
document.write( "fractional part .289417683 by 12, getting 3.473012194\r\n" );
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document.write( "So 7 years 3 months the amount will be less than $20000 and 7 years\r\n" );
document.write( "4 months it will be more than $20000.\r\n" );
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document.write( "Edwin \n" );
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