Question

Shawnee is putting $3,500 into an account earning 4.85% interest compounded quarterly. She estimates that it will take just over 11 years for this investment to grow to $6,000. Which of the following is a true statement?

Answer 1

6000/3500=1.7142857142857142857142857142857
.0485/4=0.012125
(1+0.012125)^4*11=(1.012125)^44
n=(1.012125)^44
ln n= ln (1.012125)^44=44 ln 1.012125=0.53137837391976752152836804397775
e^ln n=n=e^0.53137837391976752152836804397775=1.7012756872591838103050179353533
So:
3500x1.7012756872591838103050179353533=$5954.465 in 11 years ☺☺☺☺

Answer 2

A=3,500×(1+0.0485÷4)^(4×11)
A=5,947.99

6000=3500(1+0.0485/4)^4t
Solve for t to know the time needed to reach 6000
Time=11.2
So the time needed is 11 years and 2 months