Question

On a deposit of $100 at a simple interest rate of 20%, How many years would it take to double your money?

Answer 1

5 years

Explanation:

Formula to calculate simple interest

A = P(1 + rt)

Where:

A = Future amount = 2(100)

P = Principal Amount = 100

r = Rate of Interest per year in decimal

r = R/100 = 20/100 = 0.2

To find,

t = Time Period

Put value in the formula

200 = 100(1 + 0.2t)

200/100 = (1 + 0.2t)

2 = (1 + 0.2t)

2 - 1 = 0.2t

1 = 0.2t

1/0.2 = t

t = 5 years

So, it will take 5 years to double money.