To calculate how long it will take for a $2,200 investment to increase to $10,000 at an interest rate of 6.5 percent, we need to use the formula for compound interest.The formula for compound interest is:A = P(1 + r/n)^(nt)Where:A is the final amountP is the principal amount (initial investment)r is the annual interest rate (expressed as a decimal)n is the number of times interest is compounded per yeart is the number of yearsIn this case, the principal amount (P) is $2,200, the final amount (A) is $10,000, and the annual interest rate (r) is 6.5 percent, which is equivalent to 0.065 as a decimal.Let's assume that interest is compounded annually, so n is equal to 1.Now, let's plug in the given values into the formula and solve for t:$10,000 = $2,200(1 + 0.065/1)^(1*t)Simplifying the equation, we get:4.5455 = (1.065)^tTo solve for t, we can take the logarithm of both sides of the equation:log(4.5455) = log((1.065)^t)Using logarithm properties, we can bring down the exponent:log(4.5455) = t*log(1.065)Now, we can isolate t by dividing both sides of the equation by log(1.065):t = log(4.5455)/log(1.065)Using a calculator, we can find that t is approximately 15.29 years.Therefore, it will take approximately 15.29 years for a $2,200 investment to increase to $10,000 at an interest rate of 6.5 percent compounded annually.
FAQs
How long will it take to increase a $2,200 investment to $10,000 if the interest rate is 6.5 percent? - brainly.com? ›
Expert-Verified Answer
How long will it take an investment of $10000 to double if the investment earns interest at the rate of 8% compounded continuously? ›So it would take approximately 8.68 years for the $10,000 deposit to double with continuous compounding at an interest rate of 8%.
How long will P40 000 amount to p51 200 if the simple interest rate is at 12% per annum? ›Substituting the given values, we get T = P11,200 / (P40,000 * 0.12) = 2.33 years.
How long will it take for an investment to double in value if it earns 6% compounded continuously? ›Therefore, it would take approximately 12 years for an investment earning a six percent annual rate of return to double, assuming that the interest is compounded annually.
How long will it take to increase a $2200 investment to $10000 if the interest rate is 6.5 percent? ›Expert-Verified Answer
It will take approximately 15.27 years to increase the $2,200 investment to $10,000 at an annual interest rate of 6.5%.
So, if the interest rate is 6%, you would divide 72 by 6 to get 12. This means that the investment will take about 12 years to double with a 6% fixed annual interest rate. This calculator flips the 72 rule and shows what interest rate you would need to double your investment in a set number of years.
What is the amount if 10000 is invested at 10 pa for 2 years when compounded annually? ›=Rs. 10000(1+102×100)2(1+102×100)=Rs. 12705.
How many years will $400 yield an interest of $112 at 14% simple interest? ›| Question | Answer |
|---|---|
| In how many years will $400 yield an interest of $112 at 14% simple interest? | 2 years |
| Principal = $39,300, Rate = 4.5%, Time = 6 months. What will that total principal + interest payment be rounded to the nearest dollar. | $40,184 |
Now plugging your given into this: P = 10,000, r = 2% or 0.02 in decimal form, n = 4, since it is compounded quarterly, t = 5 years. So maturity value = A = 10,000(1 + (0.02)/4)^(4x5) = Php 11,048.96. Thus the interest = maturity value - principal = 11,048.96 - 10,000 = Php 1,048.96.
What is the 7 year rule in investing? ›The 7-Year Rule for investing is a guideline suggesting that an investment can potentially grow significantly over a period of 7 years. This rule is based on the historical performance of investments and the principle of compound interest.
What is the 8 4 3 compounding rule? ›
An investment of Rs 30,000 every month with annual returns of 12 per cent, it takes eight years to reach your first Rs 50 lakh. But it takes just half the time, or just four years, to earn your second Rs 50 lakh, and for the third Rs 50 lakh, you need just three years.
How to earn 12 percent interest? ›- Stock Market (Dividend Stocks) ...
- Real Estate Investment Trusts (REITs) ...
- P2P Investing Platforms. ...
- High-Yield Bonds. ...
- Rental Property Investment. ...
- Way Forward.
Which Is Better, Simple or Compound Interest? It depends on whether you're saving or borrowing. Compound interest is better for you if you're saving money in a bank account or being repaid for a loan. If you're borrowing money, you'll pay less over time with simple interest.
What pays interest semiannually? ›Interest payments on bonds can be distributed semiannually as can company dividends. U.S. Treasury bonds pay a yield semiannually. Semiannual is often confused with the word biennial, which means something that happens every other year.
How many times a year is interest compounded semiannually? ›Compounding interest semiannually means that the principal of a loan or investment at the beginning of the compounding period, in this case, every six months, includes the total interest from each previous period.
How long would it take to double an investment earning a 8% return? ›For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money. Note that a compound annual return of 8% is plugged into this equation as 8, and not 0.08, giving a result of nine years (and not 900).
How long will it take an investment of $9000 to double if the investment earns interest at the rate of 7% compounded continuously? ›Thus, the investment will roughly take 9 years to double.
How long would $100 000 take to double at a simple interest rate of 8? ›Expert-Verified Answer
It will take 12.5 years to double the amount of $100,000 with a rate of 8%.
Answer and Explanation:
Since it is compounded semi-annually, the interest rate would be 8% / 2 = 4%. For semi-annual, the number of years would be 17.7 / 2 = 8.8. Hence, it will take 8.8 years to double the investment.