SOLUTION: How long does it take for an investment to double in value if it is invested at 10% compounded monthly
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Question 1155375: How long does it take for an investment to double in value if it is invested at 10% compounded monthly
Found 2 solutions by Boreal, ikleyn:
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
rule of 70, 7 years is estimate
P=Po(1+(.10/12))^nt
P/Po=2
2=(1+.10/12)^nt
ln both sides
ln2=nt(ln (1+.10/12)
ln2=nt*.008299
nt=83.52 months rounding at end.
t=12 because 12 compounding a year
6 years and 11 1/2 months (rounding), which is close to the 7 year estimate.
Answer by ikleyn(52775) (Show Source): You can put this solution on YOUR website!
.
In this problem, as in ANY OTHER discretely compounding problem, the answer can be
ONLY integer number of compounding periods.
In this case, the answer is 7 years, which is 84 months (84 compounding periods).
And it is THE EXACT answer to this problem - not an estimate or rounding.
Again : the EXACT and uniquely correct answer is 84 months = 7 years.
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