Question

Wilson invests $8000 in an account that pays 6.4% per year compounded quarterly.

a) Find the amount in the account after 3 years.
b) How long will it take for the investment to double?
c) how long will it take for the amount to be $10500?

I don't really know how to do this.. please help! thanks a lot!!

Answer 1

do you know the formula for compound interest?

Answer 2

um... A=P(1+r/n)^nt??

Answer 3

isn't it?

Answer 4

\[Compound interest = principle * ( 1 + ((rate/100)^t))\]

Answer 5

Keita, you are right :)

Answer 6

keita you are right. so what is n in your equation, what is P , what is r and what is t?

Answer 7

So it is 8000 * ( 1.064 ^ 12)
= 16841.84

Answer 8

For the first part

Answer 9

8000 (1 + .064/4)^(4*t)

Answer 10

ishan; compunded quarterly means that the yearly interest rate is divided up and paid out 4 times a year right?

Answer 11

yup
my bad i missed the quarterly

Answer 12

:) i do that all the time ;)

Answer 13

Using amistres formula
it is 8000 ( 1 + 0.64/4) * 4 ^ t = 16000
4^t * 1.016 * 8000
= 4^t * 8128 = 16000
4^t = 7872
t = log 7872 to the base 4
t = 6.47 years or 6 years 5 months and 20 days

Answer 14

um... so the amount after 3 years is.. 16000 or 7872?? and how long will it take to be double?