SOLUTION: Determine the time taken in years,for a sum of money to double if the interest rate is 12,64%p.a compounded half-yearly.

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Question 1134808: Determine the time taken in years,for a sum of money to double if the interest rate is 12,64%p.a compounded half-yearly.
Answer by ikleyn(53763) About Me  (Show Source):
You can put this solution on YOUR website!
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Determine the time taken in years,for a sum of money to double if the interest rate is 12,64%p.a compounded highlight%28cross%28half-yearly%29%29 semi-annually.
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To answer the question, you need to solve this equation


    %281%2B0.1264%2F2%29%5E%282%2At%29 = 2,


fOr t, where t is the time in years.


Take logarithm from both sides


    %282t%29%2Alog%28%281%2B0.1264%2F2%29%29 = log(2),


simplify 


    2t*log(1.0632) = log(2)


and get  


    t = log%28%282%29%29%2F%282%2Alog%28%281.0632%29%29%29 = 5.66 years.


So, 6 (six) years is enough to double the starting principal.


Solved.