Question 662331
Find the time required for an investment of 5000 dollars to grow to 7200 dollars at an interest rate of 7.5 percent per year, compounded quarterly.
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compound interest formula: A=P(1+r)^n, P=initial investment, r=interest rate/period, n=number of periods, A=amt after n-periods.
For given problem:
P=5000
r=.075/4=.01875
n=to find
A=7200
..
7200=5000(1+.01875)^n
7200/5000=(1.0175)^n
1.44=(1.0175)^n
take log of both sides
log(1.44)=n*log(1.0175)
n=log1.44/log(1.0175)
n≈21 quarters or 5.25 years