Problema Solution
how long does it take 2800 investment to double if its invested at 9% compound semiannually. round to the nearest tenth of a year.
Answer provided by our tutors
P = $2,800 the principal
r = 0.09 or 9% annual interest rate
m = 2 compounding period per year
i = r/m = 0.09/2 = 0.045 interest rate per period
t = years
n = t*m = 2t total number of compounding periods
A = 2P the future value (the amount in the account after t years)
A = P(1 + i)^n
2P = P(1 + i)^n
(1 + 0.045)^(2t) = 2
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t = 7.9 years
It take 7.9 years for the investment to double.