Question

10. $27,000 is invested in an account that pays 6% annual interest compounded quarterly. a. What will be the value of the account after 6 years? b. Find the year when the account will be worth $68,000?

Answer 1

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19) =) the compound interest formula we know is A= P(1+5)** Here, P= 27000 6% . 0.06 724 [as compounded quarterly ] t=6 24 So, A= 27000 (1+ 0.06 ja = 27000 (1.015324 A 38596.58 Thers, after 6 years, the value of the account will be $38,596.58 Let, the accout will be worth $ 68,000, after b. t years. ut Then 68000 - 2 27000 (1.015) = (1.015344 68 27 Taking logarithm on both sides, we have 68 4t log (1.015) = 10g ( 27 => ta 15.51 [rounded] y log (1.015) so, the account will be worth $68,000 after 15-51 years 10g (68/27)