Question

At 6.1 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 6.1 percent interest, how long does it take to quadruple it? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years.

Answer 1

a.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*(1.061)^n

2=(1.061)^n

Taking log on both sides;

log 2=n*log (1.061)

n=log 2/log (1.061)

=11.71 years(Approx)

b.We use the formula:  
A=P(1+r/100)^n
where   
A=future value($4x)
P=present value($x say)   
r=rate of interest
n=time period.

4x=x*(1.061)^n

4=(1.061)^n

Taking log on both sides;

log 4=n*log (1.061)

n=log 4/log (1.061)

=23.41 years(Approx)