At what time will this amt of money double at this fixed interest...?

Question

A sum of money invested at 2% per 6month period (semiannually) will double in amount in appromately how many years.


I know how many years, as the book provides the answer, but I do not know how they got the answer. Answer provided by book is 17.5 yrs.

Answer 1

After 6 months, the sum will become 1 + 0.02 = 1.02 times itself.

(1.02)^N = 2 will give you the value of N (number of 6 month periods) for doubling. 17.5 years is 35 periods of 6 months.

(1.02)^35 = 1.9998... almost 2

So, the answer is correct.

Answer 2

Is interest compounded? How frequently?