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Math Help - need help!

  1. #1
    Junior Member
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    May 2009
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    need help!

    so i'm just learning how to do these questions, and i'm not sure i'm doing it right.

    Amy invests $4000 at 8%/a, compounded quarterly. How long will it take for the $4000 to grow to $5000?

    is this the way you solve? am i leaving anything out?

    5000=4000(1+0.08/4)^n
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  2. #2
    Super Member
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    5000=4000(1+0.08/4)^n

    It should be 5000=4000(1+0.08/4)^4n
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  3. #3
    No one in Particular VonNemo19's Avatar
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    Detroit, MI
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    remember that the growth formula is (1+\frac{1}{n})^{n'}.

    where n is the number of compoundings. All this thing saysn is that if we take what we originally had (1) and we take a smaller and smaller return, we'll get more and more compoundings. it's kind of nice to compare (when n=n') n=1, n=10, n=50, n=100, etc... Somethins going on there.
    In your case the growth is being compounded quarterly ie n=4, but your don't nnow what n' equals so you gotta solve for it.
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