Question

# How long does it take to double your capital if you put it in an account...

How long does it take to double your capital if you put it in an account paying compound interest rate at a rate of 7%? What if the account pays simple interest ? What if the account pays continuiusly compounded interest?

We will assume the principal amount to be \$1. We need to find the time in which it becomes \$2 i.e. double the capital.

Compound Interest

We need to solve the following equation:    Hence it will take 10.2448 years at 7% compound interest to double your capital.

Simple Interest

We need to solve the following equation   It will take 14.2857 years at 7% simple interest to double your capital

Continuously compounded interest   Hence It will take 9.9021 years at 7% continuously compounded interest to double your capital.

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