# Thread: compound problem 1/2 way done

1. ## compound problem 1/2 way done

me & my friend still cannot figure out this problem we have tried to put in the decimals into the calculator but we get diff answers and none of them work yet!

find the time required for an investment of 5000 dollars to grow 9000 dollars at an interest rate of 7.5 percent per year compounded quarterly.

answer in t ___ years.

9000=5000(1+.075/4)^4t

divide by 5000
1.8= (1+.075/4)^4t

then ln1.8 =ln(1+.075/4)^4t

divide by 4 (1+.075/4) to get t alone.

ln1.8/4ln(1+.075/4) =T

i either get .0027 ,.0743, or 7.9 and none are accepted!

help!

2. find the time required for an investment of 5000 dollars to grow 9000 dollars at an interest rate of 7.5 percent per year compounded quarterly.

It is compounded at a rate of $\displaystyle 7.5 \%$ per quarter, so after each quarter you will have $\displaystyle 107.5 \%$ of your original investment.

so your equation should be.

$\displaystyle (1.075)^{4t} = 1.8$

As the investment is compounded quarterly and not continuously it would not make sense to submit an answer like 1.345 (I am not suggesting this is the answer, as it is not). Only answer of the form x.25 x.5 or x.75 make sense.

Hope this helps

Bobak