If you deposit money today in an account that pays 11% annual interest, how long will...

If you deposit money today in an account that pays 11% annual interest, how long will it take to double your money? Round your answer to two decimal places.

Expert Solution

We use the formula:
A=P(1+r/100)^n
where
A=future value($2x)
P=present value($x say)
r=rate of interest
n=time period.

2x=x*(1.11)^n

2=(1.11)^n

Taking log on both sides;

log 2=n*log (1.11)

n=log 2/log (1.11)

=6.64 years(Approx)

jeff jeffy answered 2 years ago

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