Question

How long does it take for an investment to double in value if it is invested at 8% compounded semiannually?

8.85 years
10.5 years
5.6 years
12.3 years

Is D, correct? I got 12.5

Answer 1

How did you get that?

Answer 2

I took double in value 200% divided by 8% = 25 years divided by 2 because its semiannual = 12.5 I might be doing something wrong though

Answer 3

Rule of 72 would suggest 72 / 8 = 9

Try \(1.04^{n} = 2\). Solve for n = the number of semi-annual periods.

Answer 4

I got n=17.6

Answer 5

Okay, now answer the question.

Answer 6

Is it A?

Answer 7

Why would you say that? 17.6 doesn't look much like 8.85.

Answer 8

Oh, will I figured the 17.6 was annually so I divided it by 2 for semi-annually

Answer 9

Backwards.

8% is an annual rate
4% is a semi-annual rate
n = 17.67298769 is the number of semi-annual compounding periods.
n/2 = 8.836493845 is the number of years.

It REALLY helps if you WRITE DOWN clear and useful definitions. Learning to communicate clearly not only makes for easier conversation, but it also organizes your brain!!! Who can't use a little of that?!

Answer 10

True that! So it is A?

Answer 11

Don't make me answer that. YOU tell ME what the correct answer is.

Answer 12

IM telling you its A.