Shawnee is putting $3,500 into an account earning 4.85% interest compounded quarterly. She estimates that it will take just over 11 years for this investment to grow to $6,000. Which of the following is a true statement?

a.

Shawnee's estimate of the time is too low.

b.

Shawnee's estimate of the time is correct.

c.

Shawnee's estimate of the time is too high.

d.

Shawnee does not have enough information to estimate the time.

Question

Mathematics

Tania Wiley

18 March, 10:42

Shawnee is putting $3,500 into an account earning 4.85% interest compounded quarterly. She estimates that it will take just over 11 years for this investment to grow to $6,000. Which of the following is a true statement?

a.

Shawnee's estimate of the time is too low.

b.

Shawnee's estimate of the time is correct.

c.

Shawnee's estimate of the time is too high.

d.

Shawnee does not have enough information to estimate the time.

+4

Answers (1)

Know the Answer?

Shelby Riley · Answer 1

A=3,500 * (1+0.0485:4) ^ (4*11)

A=5,947.99

6000=3500 (1+0.0485/4) ^4t

Solve for t to know the time needed to reach 6000

Time=11.2

So the time needed is 11 years and 2 months