Use the formula A=P ( 1+ r/n)

^{nt }to solve the compound interest problemFind how long it takes a $1700 investment to earn $500 interest if it is invested at 7% compounded quarterly.

$500 interest will be earned in approximately ????? years

Use the formula A=P ( 1+ r/n)^{nt }to solve the compound interest problem

Find how long it takes a $1700 investment to earn $500 interest if it is invested at 7% compounded quarterly.

$500 interest will be earned in approximately ????? years

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Winter Park, FL

You need to rearrange to isolate the variable t.

Starting with the formula

A = P (1+r/n)^{nt}

Isolate term with unknown exponent

A/P = (1+r/n)^{nt}

It might be useful to plug the values in, at this step, to simplify the work.

(1700+500)/1700 = (1 + .07/4)^{4t}

1.29412 = (1.0175)^{4t}

Rearrange a little, to simplify, a little more, moving the constant part of the exponent into the parentheses

1.29412 = (1.0175^{4})^{t}

Evaluate the statement in parentheses

1.29412 = (1.07186)^{t}

Take log of both sides to eliminate the exponent.

log 1.29412 = log 1.07186^{t}

Use power property of exponents

log 1.29412 = t * log 1.07186

Isolate the variable

t = log 1.29412/log 1.07186

Evaluate, then round to appropriate figures.

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