# Compounded Interest

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) An investment of \$37,000 was deposited in the bank. Interest was computed on a semiannual basis and was kept there for 10 years. If the maturity value of this investment is \$74,000, at what interest rate was it invested?

• Compounded Interest -

20 periods
every period amount is multiplied by (1+r)
where r = half the percent rate/100
74,000 = 37,000 (1+r)^20
2 = (1+r)^20
log 2 = 20 log(1+r)

log(1+r) = .01505

1+r = 10^.01505 = 1.03526
r = .035
2r = .07 or 7%

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