SOLUTION: A certain sum is doubled in 50 years by simple interest. At the same rate in which time the sum is doubled by compound interest?
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Question 460085: A certain sum is doubled in 50 years by simple interest. At the same rate in which time the sum is doubled by compound interest? Answer by amoresroy(361) (Show Source):
You can put this solution on YOUR website! A certain sum is doubled in 50 years by simple interest. At the same rate in which time the sum is doubled by compound interest?
Let i = the interest rate in %
To double certain sum, total interst should be 100
50*i = 100
i = 2
If 2% interest is compounded annually, the equation becomes
(1.02)^x = 2
Log both sides to get
Log (1.02)^x = log 2
x Log 1.02 = Log 2
x = Log 2 / Log 1.02
x = 35
At the same rate, the sum is doubled by compound interest in 35 years.
