Answer to Question #268317 in Financial Math for ibra

Question

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

Answer 1

Investment = 600

Future Value = 900

Quarterly Compounding

Rate = 6%/4=1.5%perquarter

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

$900=600×(1.015)^N \\ 1.5=(1.015)^N$

Taking log on both sides

Log(1.5)/Log(1.015)=N

N = 27.23 quarters or 6.80 years