A person invests 5000 dollars in a bank. The bank pays 6.25% interest compounded quarterly. To the nearest tenth of a year, how long must the person leave the money in the bank until it reaches 6500 dollars?

Solution

Solution

Time : 4.23

Solution steps

Translate the problem into an equation:

6500 = 5000 (1 + \frac{0.0625}{4})^{4 t}

Solve for

t, 6500 = 5000 (1 + \frac{0.0625}{4})^{4 t} : t = 4.23

Time : 4.23

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