Question 1164315: Sum of $250,000 earns interest at a rate of 12% per year compounded quarterly. How long will it take the investment to grow to $ 400,000? Answer by Boreal(15235) (Show Source):
You can put this solution on YOUR website! P=Po(1+(r/t))^n
400000=250000(1+.03)^nt, the nt being the total number of times it is compounded.
1.6=1.03^nt
ln both sides
0.4700=nt ln 1.03
nt=15.901
t=3.975 years. After 15 quarters it will not be 400000 but after 16 it will be more than 400000.
Rough check
12% of 250000 is 30000
four years of that without compounding would be 120000 more or 370000
with compounding, the above answer is reasonable.
