How many years will it take $9,000 to grow to $17,700 if it is invested at 9% (A

Question

How many years will it take $9,000 to grow to $17,700 if it is invested at 9%

(A) compounded quarterly? Round to two decimal places

(B) compounded continuously? Round to two decimal places

In its first 10 years a mutual fund produced an average annual return of 20.79%. Assume that money invested in this fund continues to earn 20.79% compounded annually. How long will it take money invested in this fund to double? Round to the nearest year.

A person wishes to have $20,100 cash for a new car 7 years from now. How much should be placed in an account now, if the account pays 5.6% annual interest rate, compounded weekly? Round to the nearest dollar.

Suppose that $4,600 is invested at 5.2% annual interest rate, compounded monthly. How much money will be in the account in (A) 6 months? (B) 4 years? Round to the nearest cent.

Explanation / Answer

A=P(1+(r/n))nt

17700=9000(1+(0.09/4))4t

177/90=(4.09/4)4t

t=7.6years

B. A=P ert

17700=9000 e0.09t

ln(177/90)= 0.09t

t=7.5years

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