Calculate the number of years for an investment of $1000 to double at an interest rate of 7.2% for eachperiod:

Question

Calculate the number of years for an investment of $1000 to double at an interest rate of 7.2% for each compounding period.
a) annually
b) semi-annually

... plz show all steps and the formula ... thnku =)

Answer 1

x = number of periods

(1.072)^x = 2
by definition then
x = log (base of 1.072) 2
OR
x = -log (base 2) 1.072

just use your calculator on this one.

Answer 2

It means that after each period you get the ammount that you already had + 7.2% of that ammount.
1000 + 1000 (7.2/100)
= 1000 + 1000 (72/1000)
= 1000 + 72
= 1072.

For next year you add 7.2% of 1072 to 1072.
For semi-anual calculation, you can devide 7.2% by 2...