If $450 is deposited in an account paying 8.7% annual interest, compounded semiannually, how long will it take for the account to increase to $750?
A. 5.5 yr
B. 5.0 yr
C. 6.0 yr
D. 4.5 yr
E. 4.0 yr
A. 5.5 yr
B. 5.0 yr
C. 6.0 yr
D. 4.5 yr
E. 4.0 yr
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750 = 450(1 + 0.087/2)^2t, where t is number of years
750 = 450(1.0435)^2t
(1.0435)^2t = 5/3
log(1.0435^2t) = log(5/3)
2t[log(1.0435)] = log(5/3)
t = [log(5/3)] / 2log(1.0435) = 6 years <==answer
750 = 450(1.0435)^2t
(1.0435)^2t = 5/3
log(1.0435^2t) = log(5/3)
2t[log(1.0435)] = log(5/3)
t = [log(5/3)] / 2log(1.0435) = 6 years <==answer