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If $5200 is invested at a rate of 8.6% compounded quarterly, how long will it take, to the nearest hundredth of a year, until the investment is worth $11,600

Answer :

calculista

Answer:

[tex]t= 9.43\ years[/tex]

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

[tex]t=?\ years\\ P=\$5,200\\ r=8.6\%=8.6\100=0.086\\n=4\\A=\$11,600[/tex]  

substitute in the formula above

[tex]11,600=5,200(1+\frac{0.086}{4})^{4t}[/tex]  

[tex]11,600=5,200(1.0215)^{4t}[/tex]  

[tex](11,600/5,200)=(1.0215)^{4t}[/tex]  

Applying log both sides

[tex]log(11,600/5,200)=log(1.0215)^{4t}[/tex]  

applying property of logarithms

[tex]log(11,600/5,200)=(4t)log(1.0215)[/tex]  

[tex]t=log(11,600/5,200)/[(4)log(1.0215)][/tex]

[tex]t= 9.43\ years[/tex]

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