Question

How long will it take for a $2000 investment to grow to $2786 at an annual rate of 4.6% , compounded quarterly? Assume that no withdrawals are made.

Answer 1

7.4

Explanation:

use the compound interest formula

I=P(1+r/100)<n

2786=2000(1+4.6/100)^n

divide 2000 by both side

1.393=(1+4.6/100)^n

1.393=1.046^n

introduce the log

log1.393=rlog1.046

divide both with log1.046 to get the value of n

n=7.4