Question

Find how long it takes$ 2500 to double if it is invested at 6 % interest compounded semiannually. Use the formula A=P(1+r/n ) to solve the compound interest problem.
It will take approximately ___years.

Answer 1

It takes 11.55 years for money to double if invested at 6% compound interest.

What is compound interest?

• The interest that is calculated using both the principal and the interest that has accrued during the previous period is called compound interest.
• It differs from simple interest in that the principal is not taken into account when determining the interest for the subsequent period with simple interest.
• Compound interest is commonly abbreviated C.I. in mathematics.

Calculating the answer exactly:  P⁰°⁰⁶ⁿ=A .

We don’t know the initial value of the principal but we do know that the accumulated value is double (twice) the principal.

P⁰°⁰⁶ⁿ = 2P

We divide both sides by  P

e⁰°⁰⁶ⁿ = 2

Using natural logarithm:

0.06 n = ln(2)

n = ln(2)/0.06

n = 11.55 years

Hence, It takes 11.55 years for money to double if invested at 6% compound interest.

To know more about compound interest check the below link:

brainly.com/question/24274034

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