Financial Math Questions help me solve

Question

A sum of $8 600 is invested in a bank account where interest is calculated at 15.5% per annum.

a.     If this sum is invested for 20 years, what amount will it come to at the end of this twenty-year period if interest is calculated as compounded quarterly?

b.     What length of time will it take for the original amount to triple if interest is calculated as compound interest? Round to two decimal places.

Answer 1

A. Compound intrest formula A=P(1+R/N)^NT

Where

A=Final Amount (what we are finding)

P=Principal investment ($8,600)

R=rate (15.5%)

N=number of times interest applied per time period (4)

T=Number of Periods (20)

A= 8600(1+.155/4)^4*20

A=8600(1.03875)^80

A=8600(20.935481)

A=180045.14

For B use the same formula but we are finding T

B. Compound intrest formula A=P(1+R/N)^NT

Where

A=Final Amount (25,600)

P=Principal investment ($8,600)

R=rate (15.5%)

N=number of times interest applied per time period (4)

T=Number of Periods (20)

25600=8600(1+.155/4)^4T

3=(1+.115/4)^4T

Log(3)=4T*Log(1.03875)

~.47712/~.01651=4T

~28.90/4=t

~7.22 Years