Question

On january 1, 1980, moises deposited $1850 into a savings account paying 5.6% interest, compounded quarterly. if he hasn't made any additional deposits or withdrawals since then, and if the interest rate has stayed the same, in what year did his balance hit $3700, according to the rule of 72?

Answer 1

1992 for apex yall it says i have to at least 20 characters so thats why this answer is long and im just talking at this point to make up the characters. you dont have to read this part tbh i dont even know anymore. goodluck on that test tho homie

Answer 2

We first calculate for the effective interest of the given nominal interest that is compounded quarterly through the equation,
ieff = (1 + i/4)^4 - 1
Substituting the known values,
ieff = (1 + 0.056/4)^4 -1 = 0.05718

To determine the future worth of a money invested with an interest that is compounded, the equation is,
F = P x (1 + ieff)^n
where P is the present worth and n is the number of years.

For this item, we substitute the known terms in the derived second equation
3700 = (1850) x (1 + 0.05718)^n
The value of n is 12.46 years.

Therefore, the money will be worth $3700 only on 1992.