Question

find the number of years it would take for 748 to increase by 72 percent if invested at interest rate 7.9 percent per annum, compounded semi-annually

Answer 1

Given,

Principal amount = 748

Increased amount = 72 % of 748

So, total amount = $\frac{172\times 748 }{100} =1286.56$

Rate of interest = 7.9% per annum compounded semi annually

So, rate of interest for the semi annual $= \frac{7.9}{2} = 3.45$ %

$A= P(1+R\%)^n$

$\Rightarrow 1286.56 = 748(1+\frac{3.45}{100})^n$

$\Rightarrow 1.72=1.0345^n$

Taking log of both side,

$\Rightarrow n= \frac{\log(1.72)}{\log(1.0345)}$

$\Rightarrow n = 15.98$

$\Rightarrow n \simeq 16$

Hence, total number of year will be 8 years.