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Question 599509: How long does it take for an amount of money P to double itself if its invested at 7% interest compounded 3 times a year?
Answer by htmentor(1343)   (Show Source):
You can put this solution on YOUR website! How long does it take for an amount of money P to double itself if its invested at 7% interest compounded 3 times a year?
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The compound interest formula can be written
P(n) = P((1 + r/n)^(Yn)
where P = the initial principal, r = the interest rate, Y = the number of yrs, n = number of times per yr the interest is compounded
So we need to find Y for P(n)/P = 2
2 = (1+0.07/3)^(3Y)
Solve for Y:
log 2 = (3Y)*log(1+0.07/3) = 0.0692*Y
Y = log 2/0.0692 = 10.02 years
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