SOLUTION: Find the time it would take for the general level of prices in the economy to double at an average annual inflation rate of 7.1%.

Question 1131174: Find the time it would take for the general level of prices in the economy to double at an average annual inflation rate of 7.1%.
Answer by addingup(3677) (Show Source): You can put this solution on YOUR website!
Find time for an annually compounding rate of 7.1% to double:
.
t = ln(A/P)/ln(1 + r) = [ln(A) - ln(P)] / ln(1 + r)
t = ln(2/1)/ln(1 + 0.071)
= [ln(2) - ln(1)]/ln(1 + 0.071)
= 0.3/0.03 = 10
It would take 10 years.
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SOLUTION: Find the time it would take for the general level of prices in the economy to double at an average annual inflation rate of 7.1&#8203;%.