MATA32H3 Study Guide - Midterm Guide: Net Present Value, Binomial Theorem, Farad

Compound Interest In Exercises 93-96, complete the table by determining the amount of money P (present value) that should be invested at rate r to produce a balance of $100,000 in t years.

r = 5 %

Compounded monthly

Sophie invests $12 000 at an interest rate of 3.8%, compounded quarterly (four times per year). How long will it take for Sophie’s investment to reach $30 000? Express your answer in years, correct to 1 decimal place.

Use the following formula:  where A = the amount of the investment, P = the original

amount invested (the principal), r = the interest rate (in decimal form), n = the number of compounding periods t = the number of years the principal is invested for