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Find the time t, in years, for the principal P= $720 to reach the future value F = $735 under r = 1.74% interest compounded quarterly. Round your final answer to two decimal places.​

1 Answer

4 votes

Answer:

  • 1.19 years

Explanation:

Given

  • P = $720
  • F = $735
  • r = 1.74%
  • Compound n = 4t
  • Time = t = ?

Solution

  • 735= 720*(1 + 0.0174/4)^n
  • 1.00435^n = 735/720
  • 1.00435^n = 1.02083333333
  • log 1.00435^n = log 1.02083333333
  • n= log 1.02083333333 / log 1.00435
  • n = 4.75
  • t = 4.75/4
  • t = 1.1875 = 1.19 rounded to 2 decimal places
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