Question

Find how long it takes a $700 investment to earn $230 in interest If it is invested at 5% compounded semi-annually.

- round 3 decimal places

Answer 1

P x (1+r/n)^nt = F

where P is principal

r is the rate

n is the number of times per year

t = years

P x (1+r/n)^nt = F

700*(1+.025)^2t) =930

divide by 700

(1.025)^2t = 93/70

2t log (1.025) = log (93/70)

2t = log (93/70) divided by log (1.025)

2t =11.5056

t=5.753 years