Question

At 6 percent interest, how long does it take to double your money? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years At 6 percent interest, how long does it take to quadruple your money? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years

Answer 1

Answer:

1. 11.90

2. 23.79

Explanation:

How Long Does It Take To Double Your Money?

A=P(1+r/100)^n

where

A=future value($2x say)

P=present value($x say)

r=rate of interest

n=time period.

SOLUTION

A=P(1+r/100)^n

2x=x(1+6/100)^n

Divide both side by x

2=(1+6/100)^n

2=(1.06)^n

Taking log on both sides;

log 2=n*log 1.06

Making n subject of the formular

n=log 2/log 1.06

=11.90 years(Approx).

How Long Does It Take To Quadruple Your Money?

We use the same formula:

A=P(1+r/100)^n

where

A=future value($4x say)

P=present value($x say)

r=rate of interest

n=time period.

SOLUTION

A=P(1+r/100)^n

4x=x(1+6/100)^n

Divide both side by x

4=(1+6/100)^n

4=(1.06)^n

Taking log on both sides;

log 4=n*log 1.06

Making n subject of the formular

Hence n=log 4/log 1.06

=23.79 years(Approx).