You invest $6000 into an account paying 3.75% annual interest compounded bimonthly (every 2 months), and you want to have $10,000 saved for your first year of college. How long will it take for your investment to grow that large? Round your answer to the nearest whole number.

Question

London Price

Mathematics

14 December, 05:35

You invest $6000 into an account paying 3.75% annual interest compounded bimonthly (every 2 months), and you want to have $10,000 saved for your first year of college. How long will it take for your investment to grow that large? Round your answer to the nearest whole number.

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Answers (1)

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Kristopher Peterson · Answer 1

The formula is

A=p (1+r/k) ^kt

A future value 10000

P present value 6000

R interest rate 0.0375

K compounded every two months 6

T time?

We need to solve for t

T = [log (A/p) : log (1+r/k) ]:k

T = (log (10,000:6,000) : log (1+0.0375:6)) : 6

T=13.7 years

Round your answer to get

T=14 years