Question

How long will it take a given sum of money (Say in Rupees) to increase 4 times its present value when compounded half yearly at 7% rate of interest?

Answer 1

Answer:

The interest rate is 7% compounded half yearly.

₹1 becomes ₹4, at n years.

Yearly factor,

((1+ (0.07/2))^2 = 1.071225

1.071225 ^ n = 4

n × log (1.071225) =log (4)

n = log (4) ÷ log (1.071225)= 20.15.

The period is 20.15 years.