Question 1096128: Bob has $8300.00 he invests at a rate of 6.2% interest per year compounded quarterly.
a) how much does Bob have after 3 and 1/2 years ?
b) how kind will it take for Bob’s investment to reach $15,000.00 ?
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! this is of the form P=Po(1+(r/t))^(nt), where r is the rate, t the frequency compounded each year and nt the total number of times it is compounded.
P=8300(1+0.062/4))^14=$10,294.31
Calculate the parenthetical term first then round at the end.
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15000=8300(1+0.062/4))^n
1.8072=(1+0.062/4))^n
without rounding, take ln both sides
ln (1.8072)= n ln (1.0155); divide both sides by ln (1.0155), round at end.
n=38.475 compoundings.
There are 4 such per year, so it will take a little more than 9 1/2 years.
Check
The rule of 72 would say that this should double in about 11.6 years (72/6.2).
At 9 3/4 years, it has not quite doubled.
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