How long will it take to double your money if the interest rate is 10% compounded semi annually? (Round to 2 decimal places.) | Homework.Study.com (2024)

Question:

How long will it take to double your money if the interest rate is 10% compounded semi annually? (Round to 2 decimal places.)

Compound Interest

Investment made on compound interest could make the amount grow faster as the return value of the succeeding end of the period is dependent on the current value. To put it simply, the in compound interest, the amount invested grows exponentially, unlike in simple interest wherein the growth is linear. The formula for the future value in an investment done in compound interest is as follows.

$$F = P\left(1 + \frac{r}{n} \right)^{nt}$$

Here, {eq}F{/eq} is the future value, {eq}P{/eq} is the principal value invested, {eq}r{/eq} is the interest rate, {eq}n{/eq} is the number of times the investment is compounded in a year, and {eq}t{/eq} is the number of years through the investment.

Answer and Explanation:1