To find out how many times your investment will increase over 7 years, you need to use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal investment amount ($15770.00)
r = annual interest rate (13.70% or 0.1370)
n = number of times interest is compounded per year (semi-annually means 2 times per year)
t = number of years (7)
Plugging in the given values in the formula:
A = 15770(1 + 0.1370/2)^(2*7)
A = 15770(1 + 0.0685)^(14)
A = 15770(1.0685)^(14)
A ≈ 15770(1.077316339)
A ≈ 16994.42
So, the investment will increase to approximately $16994.42 after 7 years.
To find out how many times the investment increased, divide the future value by the principal amount:
Number of times = A / P
Number of times = 16994.42 / 15770.00
Number of times ≈ 1.0784
Therefore, your investment will increase by approximately 1.0784 times over 7 years.
If you invest $15770.00 at a rate of 13.70% per annum compounded semi-annually, by how many times will your investment increase over 7 years?
1 answer