Landon opened a savings account with a deposit of $3,786.45. Nine years later, the balance in the account is $5,135.29. If the interest rate is 3.4%, how often does the interest compound?
FV = PV [1 + R]^N
5,135.29 =3,786.45 [1 + 0.034/N]^N, solve for N
N = 36
36/9 =4 number of componding periods per year, or quarterly compound.
+129657 Landon opened a savings account with a deposit of $3,786.45. Nine years later, the balance in the account is $5,135.29. If the interest rate is 3.4%, how often does the interest compound?
5135.29 = 3786.45 (1 + .034/ n ) ^[9n]
I think this might be difficult to solve, algebraically [ but, I'm not sure......!!!! ]
WolframAlpha shows the answer to be n = 4 [ quarterly compounding]
Proof : 3786.45 (1 + .034/ 4 ) ^[9*4] ≈ 5135.29
