SOLUTION: Juan wants to invest $3800 in a savings account. Determine the interest rate (simple interest) required for Juan 's investment to double in value in 20 years. Round your answer to

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Question 1204321: Juan wants to invest $3800 in a savings account. Determine the interest rate (simple interest) required for Juan 's investment to double in value in 20 years. Round your answer to the nearest tenth of a percent.

Answer by math_tutor2020(3817) (Show Source):
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If Juan wishes to double his investment, then he must earn the deposit amount in interest.
He must earn $3800 when depositing $3800 to get a doubled amount 2*3800 = 7600 dollars.

i = p*r*t
3800 = 3800*r*20
r = 1/20
r = 0.05
The simple interest rate must be 5%

Or we could have these steps
A = P*(1+r*t)
2*P = P*(1+r*t)
2 = 1+r*t
2 = 1+r*20
2-1 = 20r
1 = 20r
r = 1/20
r = 0.05
These steps show that the deposit amount doesn't matter. To have a doubling time of 20 years, the simple interest rate must be 5%

Answer: 5%