If you deposit $8000 into an account paying 7% annual interest compounded quarterly, how long until there is $12400 in the account?
The formula for deducing Compounded Annual Growth rate, CAGR = {( EV / SV)^1 / n} - 1
where:
EV = Investment's ending value
SV = Investment's starting value
n = Number of investment periods (months, years, etc.)
If you rearrange the formula for deducing the time period required.
SV = $8000
EV= $12400
Total appreciation = (EV-SV)*100%/SV = 64.52%.
At CAGR of 7%, the time required for any value to appreciate 64.52% is 6 years and 6 months
Step-by-step explanation:
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