Question

In: Finance

If $300 is invested at a 4% interest rate, how much compound interest will be earned...

If $300 is invested at a 4% interest rate, how much compound interest will be earned in 4 years?

(Round to the nearest cent and do not enter the dollar sign)

Exactly how many quarters will it take to double:

$40 at 1% per quarter

(Round to two decimal places)

Expert Solution

1. Invested Amount= $300

Interest rate = 4%

Time= 4 years

Compound Interest= ?

=351 ANS

2. Time= ?

Future value= double of $40= $80 (FV)

Present value= $40 (PV)

Rate of interest per quarter is 1% (r)

Taking log with base 10 on both sides

Value of log 2 base 10= 0.30103

Value of log 1.01 base 10= 0.004321374

On substituting the value

0.30103= n*0.004321374

n=69.66 quarters ANS

jeff jeffy answered 2 years ago

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