Answer to Question #268317 in Financial Math for ibra

Question #268317

How long it takes for 600 to amount 900 at an annual rate of 6% compound quarterly


1
Expert's answer
2021-11-19T07:08:37-0500

Investment = 600

Future Value = 900

Quarterly Compounding

Rate = 6%/4=1.5%perquarter


FutureValue=Investment×(1+InterestRate)NFutureValue=Investment×(1+InterestRate)N900=600×(1.015)NFutureValue=Investment×(1+InterestRate)^N\\ FutureValue=Investment×(1+InterestRate)^N \\ 900=600×(1.015)^N \\

900=600×(1.015)N1.5=(1.015)N900=600×(1.015)^N \\ 1.5=(1.015)^N

Taking log on both sides

Log(1.5)/Log(1.015)=N

N = 27.23 quarters or 6.80 years


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