Compute the compound interest.
-$\$ 7000$ is invested at $6 \%$ compounded quarterly. In how many years will the account have grown to $\$ 12,000$ ? Round to the nearest tenth of a year.
A) $9.1 \mathrm{yr}$
B) $1.1 \mathrm{yr}$
C) $9.3 \mathrm{yr}$
D) $17.7 \mathrm{yr}$

Question

Quizplus · Accepted Answer

The formula for compound interest is $A = P(1 + \frac{r}{n})^{nt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (\$7000), $r$ is the annual interest rate (6%, or 0.06), $n$ is the number of times that interest is compounded per year (quarterly, so 4 times), and $t$ is the time the money is invested for in years. We solve for $t$ when $A = \$12,000$, $P = \$7000$, $r = 0.06$, and $n = 4$.

Compute the Compound Interest $7000\$ 7000$7000 Is Invested At 6%6 \%6% Compounded Quarterly

Compute the Compound Interest $\$ 7000$ Is Invested At $6 \%$ Compounded Quarterly