Grace invested 7,000 in an account paying an interest rate of 4.7% compounded quarterly. Assuming no deposits or withdrawals are made, how long would it take, to the nearest tenth of a year, for the value of the account to reach 11,870?

Solución

G r a ce in v es t e d 7, 000 in an a cco u n t p a y in g an in t eres t r a t e o f 4.7% co m p o u n d e d q u a r t er l y . A ss u min g n o d e p os i t s or w i t h d r a w a l s a re ma d e, h o w l o n g w o u l d i t t ak e, t o t h e n e a res t t e n t h o f a ye a r, f or t h e v a l u e o f t h e a cco u n t t o re a c h 11, 870 ?

Time : 11.3

Pasos de solución

Translate the problem into an equation:

11870 = 7000 (1 + \frac{0.047}{4})^{4 t}

Resolver para

t, 11870 = 7000 (1 + \frac{0.047}{4})^{4 t} : t = 11.3

Time : 11.3