Question

How long will money in savings take to double at 5% interest compounded annually? Round the answer to the nearest hundredth of a year.

Answer 1

For a single payment with compound interest, the equation to use is F=P(1+i)^n where F is the value after n periods, P is the present value, and i is the interest rate. 

If we want the final value F to double given 5% per year interest, F=2P then i=5.

Solving for n:

2P=P(1+0.05)^n
2=(1.05)^n
log(base 1.05)2=n
n=14.206=14.21 years