Compound Interest Rate
1. **State the problem:** Rhianna invests ₱50000 and wants it to grow to ₱65000 in 4 years with interest compounded semiannually.
2. **Identify known values:**
- Principal, $P = 50000$
- Amount, $A = 65000$
- Time, $t = 4$ years
- Compounding periods per year, $n = 2$
- We want to find the annual interest rate $r$ compounded semiannually.
3. **Formula for compound interest:**
$$A = P \left(1 + \frac{r}{n}\right)^{nt}$$
4. **Substitute known values:**
$$65000 = 50000 \left(1 + \frac{r}{2}\right)^{2 \times 4} = 50000 \left(1 + \frac{r}{2}\right)^{8}$$
5. **Divide both sides by 50000:**
$$\frac{65000}{50000} = \left(1 + \frac{r}{2}\right)^8$$
$$1.3 = \left(1 + \frac{r}{2}\right)^8$$
6. **Take the 8th root of both sides:**
$$1 + \frac{r}{2} = (1.3)^{\frac{1}{8}}$$
7. **Calculate $(1.3)^{1/8}$:**
$$ (1.3)^{\frac{1}{8}} \approx 1.03368$$
8. **Solve for $r$:**
$$1 + \frac{r}{2} = 1.03368$$
$$\frac{r}{2} = 1.03368 - 1 = 0.03368$$
$$r = 2 \times 0.03368 = 0.06736$$
9. **Convert to percentage:**
$$r = 6.736\%$$
10. **Answer:** Rhianna should invest her money at approximately **6.74%** compounded semiannually to reach ₱65000 in 4 years.
Among the options given, the closest is **6.68%**.