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SET UP THE EQUATION NEEDED TO SOLVE:

You place $700 in a bank to be compounded quarterly at 5%. How long will it take for the account to be worth $1500 if no additional
money is added?

A 1500 = 700 (1 + .05/4) ^4x
B 1500 = 700 (1 + .05/4) ^x
C 1500 = 700 (1 + 5/4) ^4x
D 1500 = 700 (1 + .05) ^4x

User Jamix
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1 Answer

3 votes

Answer:

A

Explanation:

Compound Interest Formula :

  • A = P (1 + r/n)^(nt)
  • A = amount with interest
  • P = Principal amount
  • r = rate (in decimal)
  • n = amount of times compounded
  • t = number of years

Here, we are given :

  • P = 700
  • r = 5% = 0.05
  • n = 4 (quarterly means 4 times a year)
  • A = 1500

Substituting the given values and taking x in place of t :

  • 1500 = 700(1 + .05/4)^4x
  • Option A
User Fssilva
by
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