Question

Timber Inc. invested profits of $150,000.00 in a GIC at 4.90% compounded quarterly. How long will it take for the investment to grow to a value of at least $223,000.00?____years ____months

Answer 1

The invested profit is: 150000

Formula of compund interest is:

`P=(A)/((1+(r)/(n))^(nt))`

Where,

P= principal amount

A= value of investment.

r=rate

n= number of times interest is compount per unit time

t= time

`\begin{gathered} P=(A)/((1+(r)/(n))^(nt)) \\ 150000=\frac{223000}{(1+(4.9)/((1)/(4)))^{(1)/(4)t}} \\ (1+4.9*4)^{(1)/(4)t}=(223000)/(150000) \\ 20.6^(4t)=1.4866 \end{gathered}`

`\begin{gathered} 4t\ln 20.6=\ln 1.4866 \\ 4t=(\ln 1.4866)/(\ln 20.6) \\ t=0.032 \end{gathered}`