Question 961028: How long will it take 1000 dollars to double if it is invested at 6% interest compounded semi-annually?
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! How long will it take 1000 dollars to double if it is invested at 6% interest compounded semi-annually?
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Compound Interest Formula: A=P(1+r/n)^nt, P=initial investment, r=interest rate, n=number of compounding periods per year, A=amt after t-years.
For given problem:
P=1000
r=.06
n=2
t=?
..
A/P=2=(1+r/2)^2t
(1+r/2)^2t=2
(1+.03)^2t=2
1.03^2t=2
take log of both sides
2tlog(1.03)=log(2)
t=log(2)/2log(1.03)≈11.7
How long will it take 1000 dollars to double? about 12 yrs
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