SOLUTION: Find the rate at which a sum of money will become four times the original amount in 2 years, if the interest is compounded half yearly.

Question 1037691: Find the rate at which a sum of money will become four times the original amount in 2 years, if the interest is compounded half yearly.
Answer by Alan3354(69443) (Show Source): You can put this solution on YOUR website!
Find the rate at which a sum of money will become four times the original amount in 2 years, if the interest is compounded half yearly.
--------
FV = PV*(1 + r)^t
t = 4 periods, 4 1/2 years.
r = rate per period
------
FV = 4*PV = PV*(1 + r)^4
(1 + r)^4 = 4
(1 + r) = sqrt(2)
r = sqrt(2) - 1 =~ 0.414 per period
= 0.828 per year
= 82.8%
=================
IOW, a Payday loan.
RELATED QUESTIONS
A sum of money amounts to ₦5,280 in 4 years at a certain rate of simple interest. If... (answered by Edwin McCravy,ikleyn)

Find the rate at which a sum of money will double itself in 3 years , if the interest is... (answered by jorel555)

At what rate percent compound interest does a sum of money become 2.25 times of itself in (answered by ewatrrr)

if the sum of money when compounded annually become 1140 in a 2 years & 1710 in 3 years... (answered by Theo)

1.A sum of money placed at compound interest doubles itself in 5years. in how many years... (answered by Boreal)

what is the rate percent p.a. of a sum of money which doubles in 17 years at compound... (answered by josgarithmetic)

At what rate percent will a sum of w 3,125 amount to w 3,645 in 2 years, if the interest (answered by stanbon)

a certain sum of money doubles itself at simple interest in 8 years. in how many years... (answered by mananth)

If an amount of money, called the principal, P, is deposited into an account that earns... (answered by ankor@dixie-net.com)