Question 365128: Please help me solve this word problem: at an interest rate of 8%, compounded annually, how long will it take to double an investment of $100? of 500? of 1200? I'm pretty sure that I have to use the equation A=P(1+r/n)^(nt). I need help setting it up. Would I fill in the equation like this:A=100(1+.08/x)^2?
Answer by ewatrrr(24785)   (Show Source):
You can put this solution on YOUR website!
Hi,
*Note:
A=P(1+r/n)^(nt).
A = amount of money accumulated after n years, including interest.
P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for.
n = number of times the interest is compounded per year
In this example, n is 1 as the interest compounds annually
interest rate of 8%, how long will it take to double an investment of $100
200=100*(1+.08)^t
2 = 1.08 ^t
2 = 1.08^9
t = 9 yrs to double your money (for each amount of investment given)
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