Question

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.​

Answer 1

Answer:

• 1.19 years

Step-by-step 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