SOLUTION: Mario decided to invest his $620 tax refund rather than spending it. He found a bank that would pay him 4% interest, compounded quarterly. Answer the following questions, assuming
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Question 1011686: Mario decided to invest his $620 tax refund rather than spending it. He found a bank that would pay him 4% interest, compounded quarterly. Answer the following questions, assuming that Mario deposits his entire refund and does not deposit or withdraw any other amounts.
a) Write an equation that models the growth of the investment.
b) How many years will it take for the initial investment to double. Answer by addingup(3677) (Show Source):
You can put this solution on YOUR website! This is your formula:
Number of periods:
(log(FV/PV))/(log(1+r))
FV is the future value, 1240
PV is the present value, 620
r is the interest rate per period (4% compounded quarterly= 1% per quarter)
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(log(1240/620))/(log1+0.01)= number of periods. Use your calculator and remember to divide the number of periods by 4 to get the years.
J
