Respuesta :
With a semi annual compound interest rate, the interest rate would be 35.209% compounded semi annually in order to grow from $4,000 investment to $28,000 within 6 years.
The calculation for a semi annual compound interest rate is as follows:
Given that:
A = Principal + Interest
P = Principal (Initial investment)
n = Number of compound per year
t = Time in years
We will then calculate the semi annual compound interest rate from the initial investment of $4,000 in order to grow $28,000 within 6 years:
r = n[(A/P)[tex]{1/nt\\ }[/tex] - 1]
r = 2 × [(28,000.00/4,000.00)[tex]{1/(2)(6)}[/tex] - 1]
r = 0.352094
Then the next step would be to convert r from decimal to R as a percentage:
R = r × 100
R = 0.352094 × 100
R = 35.209% per year
Therefore, an initial investment of $4,000 given a semi annual compound interest rate of 35.209%, will multiply seven fold to $28,000.00 over the period of 6 years.
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