Question
Asked Nov 8, 2019
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Nancy wants to invest $2000 in saving certificates that bear an interest rate of 9.75% per year, compounded semiannually. How long a time period should she choose to save an amount of $3000?
(Round your answer to two decimal places.)
yr
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Nancy wants to invest $2000 in saving certificates that bear an interest rate of 9.75% per year, compounded semiannually. How long a time period should she choose to save an amount of $3000? (Round your answer to two decimal places.) yr

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Expert Answer

Step 1

Refer  to the question we have to find the time period when investment of $2000 at the rate of 9.75% turns into $3000.

Principle $2000
Rate of interest = 9.75%
Amount = $3000
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Principle $2000 Rate of interest = 9.75% Amount = $3000

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Step 2

The formula to calculate the compound interest is,

nt
A = P 1
100
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nt A = P 1 100

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Step 3

Now since the compound interest is compounded semi-annua...

9.75%
=-=
2 2
Rate of interest
n = 2
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9.75% =-= 2 2 Rate of interest n = 2

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