Justin needs $3000 for a future project. He can invest $2000 now at an annual rate of 14%, compounded quarterly. Assuming that no withdrawals are made, how long will it take for him to have enough money for his project? Do not round any intermediate computations, and round your answer to the nearest hundredth. If necessary, refer to the list of financial formulas. years X 3
Justin needs $3000 for a future project. He can invest $2000 now at an annual rate of 14%, compounded quarterly. Assuming that no withdrawals are made, how long will it take for him to have enough money for his project? Do not round any intermediate computations, and round your answer to the nearest hundredth. If necessary, refer to the list of financial formulas. years X 3
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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**Input Fields:**
- A box is provided to enter the number of years the investment will take to grow to the desired amount.
**Buttons:**
- An "Explanation" button to offer more information or guidance on how to solve the problem.
- A "Check" button to verify the answer.
**Notes:**
This problem involves the use of the compound interest formula:
\[ A = P \left(1 + \frac{r}{n}\right)^{nt} \]
where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount ($2000 in this case).
- \( r \) is the annual interest rate (decimal) (14% here).
- \( n \) is the number of times that interest is compounded per year (quarterly means \( n = 4 \)).
- \( t \) is the time in years.
The task is to solve for \( t \) when \( A = 3000 \).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1bf5f2d2-c7f1-48e4-ad28-8902cdd08a04%2F81568fae-70ce-46aa-a602-f434cc09bf66%2Fso4932g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Finding the Time Required for an Investment Earning Compound Interest**
Justin needs $3000 for a future project. He can invest $2000 now at an annual rate of 14%, compounded quarterly. Assuming that no withdrawals are made, how long will it take for him to have enough money for his project? Do not round any intermediate computations, and round your answer to the nearest hundredth.
If necessary, refer to the [list of financial formulas](#).
**Input Fields:**
- A box is provided to enter the number of years the investment will take to grow to the desired amount.
**Buttons:**
- An "Explanation" button to offer more information or guidance on how to solve the problem.
- A "Check" button to verify the answer.
**Notes:**
This problem involves the use of the compound interest formula:
\[ A = P \left(1 + \frac{r}{n}\right)^{nt} \]
where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount ($2000 in this case).
- \( r \) is the annual interest rate (decimal) (14% here).
- \( n \) is the number of times that interest is compounded per year (quarterly means \( n = 4 \)).
- \( t \) is the time in years.
The task is to solve for \( t \) when \( A = 3000 \).
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