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1 January, 09:19

Find out how long it takes a $3,500 investment to double if it is invested at 7%

compounded quarterly Round to the nearest tenth of a year. Use the formula

A = P (1+)

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Answers (1)
  1. 1 January, 09:45
    0
    9.99 years

    Step-by-step explanation:

    P=$3,500

    r=7%=0.07

    n=4 (quarterly)

    A = double of $3,500=

    $3,500*2=$7,000

    t=?

    A=p (1+r/n) ^nt

    $7,000=$3,500 (1+0.07/4) ^4t

    $7,000=$3,500 (1+0.0175) ^4t

    $7,000=$3,500 (1.0175) ^4t

    Divide both sides by $3,500

    2 = (1.0175) ^4t

    Take the log to base 10 of both sides

    log2=4t * log1.0175

    0.30103=4t * 0.00753

    0.30103=4 (0.00753) t

    0.30103=0.03012t

    t=0.30103/0.03012

    t=9.99435

    Approximately

    9.99 years
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