How do you determine how much time is required for an investment to double in value if interest is earned at the rate of 6.25% compounded annually?

Question

17253 views around the world

You can reuse this answer
Creative Commons License

Answer 1 · 2016-09-04T18:43:40

Time reqd. #"appr. "11.45" yrs."#

Let the Principal #P# be doubled in #n# years at the given rate.

We know that #A=P(1+r/100)^n#

Here, #A=2P, P=P, r=6.25%, n=?#

#:. 2P=P(1+6.25/100)^n#

#:. 2=(17/16)^n#

#:. log_10 2=n(log_10 17-log_10 16)#

#:. 0.3010=n(1.2304-1.2041)=n(0.0263)#

#:. n=0.3010/0.0263~~11.45

Hence, time reqd. for the purpose is #"appr. "11.45" yrs."#