Question

a man invests $5000 in an account that pays 8.5% interest per year, compounded quarterly. (a) find the amount after 2 years? (round your answer to the nearest cent.) $ 5915.98 correct: your answer is correct. (b) how long will it take for the investment to triple? (round your answer to two decimal places.)

Answer 1

As a result, after 33 years, the investment is worth $6,435.09

How is the value of an investment determined?

Using this formula, you can use compound interest to determine the value of the future: The present value times the interest rate times n is the future value. Utilize this formula to determine the value of the future using simple interest: Future value is equal to the present value multiplied by [1] plus the interest rate multiplied by the time.

Apply the equation A(t) = P(1+r/n) nt, where:

A(t) is the investment's value after t years, t is the number of years,

The annual number of times it is multiplied by n,

p is the amount invested,

r is the annual interest rate.

To obtain: substitute

P=5000 for

r=8.5%=0.085,

n=4, and

t=3.

A(3) = 5000(1+0.085/4)4(3)

A(3) = 5000 (1+0.02125)12

A(3) = 5000 (1.02125)12

A(3) = $6,435.09

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