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

Tutors, please sign in to answer this question.

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.

- Math Help 5449
- Math 9866
- Math Word Problem 4501
- Math Problem 1018
- Math Question 798
- Finite Mathematics 581
- Probability 1438
- Probability & Statistics 735
- Math Equations 957
- Algebra Help 967