How long would it take for an amount of money invested at an annual rate of 8%, compounded semiannually, to triple?
I don't need the exact answers. I just need some explanation on how to solve it.
2007-02-24 10:47:49 · 6 answers · asked by Panda 3 in Science & Mathematics ➔ Mathematics
general formula is A = P(1+r/n)^nt, and you want 3P = P(1+0.08/2)^2t, which is 3 = 1.04^(2t). so
log 3 = log [ 1.04^(2t)]
log 3 = 2t • log 1.04
t = (log 3) / (2 log 1.04)
t = 14.0055 years
which means you won't have the triple until the compounding in the middle of the 15th year.
2007-02-24 10:55:52 · answer #1 · answered by Philo 7 · 1⤊ 0⤋
just multiply 1.04 x 1.04 x 1.04...and so on until you
get 3 or more. that's the number of intervals.
however, that depends upon the precise def of the
interest rate.....always confuses me, but i reckon there are laws about how it is precisely defined.
a good rule of thumb...take 70 and divide it by the
interest rate....that's the doubling time in years.
2007-02-24 18:54:21 · answer #2 · answered by farmer 4 · 0⤊ 0⤋
principal times {1 + (percent as decimal/times per year)}^(times per year times years)
for example, let's say it was 5000 at 8% semianually after 3 years
5000 X {1+(.08/2)}^6
2007-02-24 18:57:58 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I gotta question for you!
You've been a member for only 2 weeks, and yet you got over 200 points! Do you do anything else but answer questions?
2007-02-24 18:51:40 · answer #4 · answered by MRS MCCRUM 1 · 0⤊ 1⤋
roughly 36 years not sure though
2007-02-24 18:50:36 · answer #5 · answered by Amy 3 · 0⤊ 0⤋
ur too smart, get dumber
2007-02-24 18:50:04 · answer #6 · answered by Anonymous · 0⤊ 3⤋