Explanation Given information: The amount $ 4000 is invested at an interest rate of 9.75 % per year to obtain the amount of $ 5000 . Formula used: Compound interest is calculated by the formula, A ( t ) = P ( 1 + r n ) n t …… (1) Here, P represents principal, r represents interest rate per year and t represents number of years and A ( t ) for amount after t years and n represents number of time interest is compounded per year. Calculation: Since, there are two half years in an year, it means that the value of n is 2. Substitute 5000 for time A ( t ) and 0.0975 for r , 4000 for P and 2 for n in equation (1) to obtain the value of t . 5000 = 4000 ( 1 + 0.0975 2 ) 2 ( t ) 5000 4000 = ( 1 + 0

7th Edition

ISBN: 9781305115545

Author: James Stewart, Lothar Redlin, Saleem Watson

Publisher: Cengage Learning

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Chapter 4.5, Problem 92E

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The time required for the amount to become $5000 for the investment of $4000 at 9.75% per year interest rate,compounded semiannually.

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Chapter 4.5, Problem 91E

Chapter 4.5, Problem 93E

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The time required for the amount to become $ 5000 for the investment of $ 4000 at 9.75 % per year interest rate,compounded semiannually.

Solution Summary: The author calculates the time required for the amount to become 5000, based on the formula of A(t) and 0.0975.

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To find:

The time required for the amount to become $5000 for the investment of $4000 at 9.75% per year interest rate,compounded semiannually.

Want to see the full answer?

Chapter 4 Solutions

The time required for the amount to become $ 5000 for the investment of $ 4000 at 9.75 % per year interest rate,compounded semiannually.

Solution Summary: The author calculates the time required for the amount to become 5000, based on the formula of A(t) and 0.0975.

Concept explainers

Videos

To find: The time required for the amount to become $5000 for the investment of $4000 at 9.75% per year interest rate,compounded semiannually.

Want to see the full answer?

Chapter 4 Solutions

To find:

The time required for the amount to become $5000 for the investment of $4000 at 9.75% per year interest rate,compounded semiannually.