Answer to Question #196115 in Financial Math for Zethembiso

Question

Round your answer to the nearest year. Find the number of years it would take for R748 to increase by 72% if it is invested at an interest rate of 7,9% per annum, compounded semi-annually

Answer 1

Amount, $A=748\times 172/100=R1286.56$

$A=P(1+r/100)^{2n}, r=7.9/2=3.95\%$

$1286.56=748(1+3.95/100)^{2n}$

$1.72=(1.0395)^{2n}$

$(log1.72)/(log1.0395)=2n$

$2n=13.999$

$n=7yrs$