Question

Help Pwease :) Shanks! Find out how long it takes a $3300 investment to earn $300 interest if it is invested at 7% compounded quarterly. Round to the nearest tenth of a year. Use the formula A=P(1+r/n) ^nt

Answer 1

A is the amount of the investment, after t years. So you want to find t when A = $3600 (do you see that?). You have n=4 (# of compounding periods per year) and r=0.07.

So set up the equation:

3300=3000(1+0.07/4)^4t

You will solve this for t.

Answer 2

divide both sides by the 3000, so you will have something of the form:

a=b^4t

from there, switch from the exponential to the log form and you are nearly done. :)