A man invests $4000 in an account that pays 7.5% interest per year, compounded quarterly.

Question

(a) Find the amount after 2 years? (Round your answer to the nearest cent.)

(b) How long will it take for the investment to triple? (Round your answer to two decimal places.)

Answer 1

FV = PV(1+r/n)^(nt)

4K(1+.07.5/4)^4(2)

4,000(1..01375)^8

= $4,461.77 in 2 years at 7.5% compounded quarterly

triple time?

3 = 1.01375^4t solve for t= triple time

t= about 20 years