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.

Daniel B.

Experienced Harvard Grad For SAT Prep and K-6 Reading

Teaneck, NJ

5.0
(81 ratings)

Lorraine S.

Lorraine's Literacy and Learning for Life

Staten Island, NY

4.9
(490 ratings)

Jing X.

IVY-graduate specializing in SAT, ACT, Math and College App

Brooklyn, NY

4.9
(77 ratings)

- Math Help 5185
- Math 9345
- Math Word Problem 4240
- Math Problem 970
- Finite Mathematics 572
- Math Question 767
- Probability 1370
- Probability & Statistics 705
- Math Equations 935
- Algebra Help 952