If $5,200 is invested at a rate of 8.6% compounded quarterly, how long will it take, to the nearest hundredth of a year, until the investment is worth $11,600?

t = 8.15 ( to the nearest hundredth of a year

Step-by-step explanation:

In this question, we are asked to calculate the number of years(rounded off) it will take an investment which is compounded quarterly to worth a certain amount.

To compute this, we have to use the formula for compound interest.

Mathematically the said amount A is;

A = P (1+r/n)^nt

Where P is the invested amount, r is the interest rate, n is the number of times investment is compounded per year and t is the number of years.

In this , we identify the parameters as follows;

A = $11,600 , P = $5,200, n = 4(quarterly means every 3 months) , t = ? , r = 8.6%

11,600 = 5200(1 + 0.086/4)^4t

Dividing both side by 5,200;

2 = (1+0.0215)^4t

2 =(1.0215)^4t

Taking logarithm of both sides;

Log 2 = Log (1.0215)^4t

Log 2 = 4tLog 1.0215

4t = Log 2/Log 1.0215

4t = 32.5848

t = 8.1462

t = 8.15 ( to the nearest hundredth of a year)

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step-by-step explanation: