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IB Mathematics Studies, Financial Mathematics, Compound Interest

How can we calculate for how long the amount of $12,000 to be deposit into an account to collect $20,000 if the account is paying 5% per annum compounded quarterly?

Thanks

How can we calculate for how long the amount of $12,000 to be deposit into an account to collect $20,000 if the account is paying 5% per annum compounded quarterly?

Thanks

- William
**Posts:**0**Joined:**Mon Jan 28, 2013 8:07 pm

IB Mathematical Studies, Compound Interest, time period

The general compounding formula is:

Where F is the future value of the investment (=$20,000), P the principal (=$12,000), r is the interest rate per compound period () and n is the number of compounding periods (unknown in our case).

Therefore

(using solver or graph)

The answer is approximately 41 quarters.

The guidelines for doing this exercise directly to GDC Casio FX-9860 is

TVM -> F2: Compound Interest -> I%=5, PV=12000, FV=-20000, P/Y=4, C/Y=4 and then press n and get the same result (=41.12).

Hope these help!!

The general compounding formula is:

Where F is the future value of the investment (=$20,000), P the principal (=$12,000), r is the interest rate per compound period () and n is the number of compounding periods (unknown in our case).

Therefore

(using solver or graph)

The answer is approximately 41 quarters.

The guidelines for doing this exercise directly to GDC Casio FX-9860 is

TVM -> F2: Compound Interest -> I%=5, PV=12000, FV=-20000, P/Y=4, C/Y=4 and then press n and get the same result (=41.12).

Hope these help!!

- nicole
**Posts:**0**Joined:**Mon Jan 28, 2013 8:10 pm

3 posts
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