Dale deposited $6000 into account with a 9.4% interest rate, compounded quarterly. Assuming that no withdrawals are made, how long will it take for the investment to grow to $7746

Answer 1

7746 = 6000 ( 1 + 9.4/400)^4t <--- interest is compounded quarterly, so the annual interest rate is divided by 4;

then divided by 100 to change from percent to decimal; hence it is divided

by 400; Also the # of interest accumulations is 4 times as frequent

7746/6000 = (1 + 9.4/400)^4t

1.291 = ( 1.0235)^4t

log 1.291 = 4t * log 1.0235

t = log 1.281 / (4 * log 1.0235) =

2.66531 years

2 years, 8 months