Asked by Anonymous

The Fresh and Green Company has a savings plan for employees. If an employee makes an initial deposit of $1000, the company pays 8% interest compounded quarterly. How many years will the employee need to leave the money in the account to have $5000?

19 years
20 years
21 years
22 years
Answered by Steve
again, the formula...

1000(1+.08/4)^(4t)=5000

Now just solve for t.
Answered by Henry
P = Po(1+r)^n = 5000,
Po = $5000.
r = 0.08/4 = 0.02.
n = The number of compounding periods.

1000(1.02)^n = 5000,
(1.02)^n = 5,
n*Log1.02 = Log5,
n = 81.274 Compounding periods.
T = 81.274Comp. * 1yr./4Comp. = 20.32 Yrs.
Answered by Henry
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