How many years it will take to double your money if your beginning balance is $1,000.00 and earns 10% interest compounded quarterly?

1 Answer
bp · David B.
May 26, 2016

#7yrs#

Explanation:

Doubling of money means that Amount#= P +I =20000#

Now using the formula # A=(1+r/n)^(nt)#, where in this case #A=20000#, #P= 10000#, #n= 4# (number of times interest is compounded in a year, #r=10%=0.1#, #t# is time in years, it would be

#20000=10000(1+0.1/4)^(4t)#

#2=(1.025)^(4t)#.

Now take log on both sides

#ln(2)= 4t ln(1.025)#

#t= 1/4 ln(2)/ln(1.025) ~= 7.02yrs ~= 7yrs#

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