Question:
Find the rate at which a sum of money will become four times the original amount in 2 years, if the interest is compounded half-yearly.
Solution:
Let the rate percent per annum be $\mathrm{R}$.
Then,
$\mathrm{A}=\mathrm{P}(1+\mathrm{R})^{2 \mathrm{n}}$
$4 \mathrm{P}=\mathrm{P}\left(1+\frac{\mathrm{R}}{200}\right)^{4}$
$\left(1+\frac{\mathrm{R}}{200}\right)^{4}=4$
$\left(1+\frac{\mathrm{R}}{200}\right)=1.4142$
$\frac{\mathrm{R}}{200}=0.4142$
$\mathrm{R}=82.84$
Thus, the required rate is $82.84 \%$.