Question

Jari invests in a CD with an annual interest rate of 6.90% compounded quarterly. How many years will it take for Jari's investment to double. Round your answer 4 decimal places and include a label

Answer 1

Answer: 10.1246 years (approx)

Explanation:

Here, She invests in a CD with an annual interest rate of 6.90% compounded quarterly.

Let the initial amount or principal = P

And, Let after t years it is doubled.

Therefore,
`2P= P(1+(6.9)/(400) )^(4t)`

⇒
`2 = (1+(6.9)/(400) )^(4t)`

⇒
`log 2 = t log(1+(6.9)/(400) )^4` ( By taking log both sides)

⇒
`log 2 = t log(1.01725 )^4`

⇒t= log 2/log 1.07080599536= 10.1245504311≈10.1246 years