Greg deposited $4000 into an account with a 9.8% annual interest rate, compounded semiannually. Assuming that no withdrawals are

Question

2 years ago

5

Greg deposited $4000 into an account with a 9.8% annual interest rate, compounded semiannually. Assuming that no withdrawals are

made, how long will it
take for the investment to grow to $4616?
Do not round any intermediate computations, and round your answer to the nearest hundredth.

Mathematics

1 answer:

Dovator [93] · Answer 1 · 2023-03-06T17:57:55+03:00

The number of years it would take $4000 to grow to $4616 is 2.92 years.

<h3>How many years would it take the investment to have a value of $4616?</h3>

When an amount earns compound interest compounded semi annually, it means that both the amount invested and the interest accrued increases in value twice yearly.

Number of years = (In FV / PV) / r

r = 9.8/2 = 4.90%
FV = future value = 4616
PV = present value = 4000

(In 4616 / 4000) / 0.049 = 2.92 years