## alessandraparatore one year ago How would I set up this problem? - Minnie deposited $5,375 into a savings account 18 years ago. The account has an interest rate of 3.2% and the balance is currently$9,561.39. How often does the interest compound?

• This Question is Open
1. tkhunny

Solve! $$5375.00\left(1 + \dfrac{0.032}{m}\right)^{18*m} = 9561.39$$ Of course, you cannot solve that for m, so I'd just try a few values. $$5375.00\left(1 + \dfrac{0.032}{1}\right)^{18*1} = ??$$ $$5375.00\left(1 + \dfrac{0.032}{2}\right)^{18*2} = ??$$ $$5375.00\left(1 + \dfrac{0.032}{4}\right)^{18*4} = ??$$ $$5375.00\left(1 + \dfrac{0.032}{12}\right)^{18*12} = ??$$ If none of those works, we'll just have to work a little harder. Note: Continuous compounding gives \$9,561.50. Maybe we should try: $$5375.00\left(1 + \dfrac{0.032}{52}\right)^{18*52} = ??$$ $$5375.00\left(1 + \dfrac{0.032}{365}\right)^{18*365} = ??$$