00:02
Okay, so this problem is about non -continuous compound interest, so this is our formula, and we're told that $500 is deposited.
00:11
That's the principle.
00:13
That's what we call p.
00:15
We're also told that the account pays 8 .5 % annual interest.
00:21
That's the interest rate, and we convert it to a decimal, and that would be 0 .085.
00:26
We're also told in the problem that the compounding is semi -annually, and for semi -annually, that's two times a year, so n equals 2.
00:35
And we're finding the time it takes for the account to increase to $800.
00:39
So the final amount a is going to be $800.
00:43
Let's find t.
00:45
So let's substitute all those numbers into the equation.
00:49
We have 800 equals 500 times 1 plus 0 .085 over 2 raised to the 2t.
01:00
Now let's take a look and see how well we can simplify 1 plus 0 .085 divided by 2.
01:06
If it's a terminating decimal, we can go ahead with that.
01:10
If it's not a terminating decimal, then it would be bad to approximate it.
01:14
So it is a terminating decimal, so i'm going to go ahead and just substitute that in there.
01:20
It is 1 .0 .425.
01:30
Okay, so our goal is to isolate t...
