Explanation Given information: The amount $ 5000 is invested at an interest rate of 7.5 % per year to get the amount of $ 8000 . Formula used: Compound interest is calculated by the formula, A ( t ) = P ( 1 + r n ) n t .............. (1) Here, P represents principal, r represents interest rate per year and t represents number of years and A ( t ) for amount after t years and n represents number of time interest is compounded per year. Calculation: Since there are 4 quarters in an year, it means that the value of n is 4. Substitute 8000 for time A ( t ) and 0.075 for r , $ 5000 for P and 4 for n in equation (1) to obtain the value of t . 8000 = 5000 ( 1 + 0.075 4 ) 4 ( t ) 8000 5000 = ( 1 + 0

Bundle: College Algebra, 7th + WebAssign Printed Access Card for Stewart/Redlin/Watson's College Algebra, 7th Edition, Single-Term

7th Edition

ISBN: 9781305718944

Author: James Stewart, Lothar Redlin, Saleem Watson

Publisher: Cengage Learning

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Chapter 4.5, Problem 91E

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The time required for the amount to become $8000 in the investment of $5000 at 7.5% per year interest rate, compounded quarterly.

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Chapter 4.5, Problem 90E

Chapter 4.5, Problem 92E

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Bundle: College Algebra, 7th + WebAssign Printed Access Card for Stewart/Redlin/Watson's College Algebra, 7th Edition, Single-Term

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The time required for the amount to become $ 8000 in the investment of $ 5000 at 7.5 % per year interest rate, compounded quarterly.

Solution Summary: The author calculates the time required for the amount to become 8000 in a compound interest rate of 7.5% per year.

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To find:

The time required for the amount to become $8000 in the investment of $5000 at 7.5% per year interest rate, compounded quarterly.

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Chapter 4 Solutions

The time required for the amount to become $ 8000 in the investment of $ 5000 at 7.5 % per year interest rate, compounded quarterly.

Solution Summary: The author calculates the time required for the amount to become 8000 in a compound interest rate of 7.5% per year.

Concept explainers

Videos

To find: The time required for the amount to become $8000 in the investment of $5000 at 7.5% per year interest rate, compounded quarterly.

Want to see the full answer?

Chapter 4 Solutions

To find:

The time required for the amount to become $8000 in the investment of $5000 at 7.5% per year interest rate, compounded quarterly.