Find the time required for an investment of 5000 dollars to grow to 8000 dollars at an interest rate of 7.5 percent per year, compounded quarterly. Your answer is t = years.

Answer 1

We have: 8000 = 5000(1 + 0.075/4)^4t; 8000/5000 = 1.01875^4t; 1.01875^4t = 1.6; 4tln1.01875 = ln1.6;

t = ln1.6/(4ln1.01875) = 6.33 years