Question 429980: You have an inheritance of $100,000. It is being invested in a Money Market account which is currently paying 4.65%, compounded monthly. How long would it take for you to allow this money to increase to a total of $250,000?
Answer by jorel1380(3719)   (Show Source):
You can put this solution on YOUR website! Since your account is earning 4.65%, your monthly interest rate is 4.65/12, or.3875 percent. This works out to as 4.75% actual yearly annual interest, if the money is left alone. In order to grow our money, we need to leave it in the account until it is 2.5 times the original amount, or until it grows by 150% (The principal plus 150% times the principal). So our equation becomes:
(4.75)^X=150
So X is approximately 18. It will take about 18 years to make 1-1/2 times your money at this rate.
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