How many years will it take for the balance left in a savings account to increase...

How many years will it take for the balance left in a savings account to increase from
2 of 2
$1,000 to $1,500 if interest is received at a nominal rate of 6% compounded
semiannually throughout the period?

Solutions

Expert Solution

FV= PV*(1+r)^n

Where,
FV= Future Value
PV = Present Value
r = Interest rate =6%/2 =3%
n= periods in number = Six months

1500= $1000*( 1+0.03)^n

1500/1000 =1.03^n

1.5 =1.03^n

n =13.72

Number of years = 13.72/2
=8.86 years

jeff jeffy answered 2 years ago

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