P=Po(1+r)^n = 5Po
Po = Initial investment.
r = (4%/4)/100% = 0.01=Quarterly % rate.
n = The number Compounding periods.
Po(1.01)^n = 5Po.
Divide by Po:
1.01^n = 5.
n*Log 1.01 = Log 5.
n = Log5/Log1.01 = 162 Compounding
periods.
162Comp. * 1yr./4Comp. = 40.5 yrs.
In many years time will a some of money quintuple at a rate of 4% per annum compounded quarterly?
1 answer