Question

If an amount of money is invested at an annual interest rate of 6%, it doubles every 12 years. If Alejandra invests $500, how long will it take for her investment to reach $2,000 (assuming she does not contribute any additional funds)?

Answer 1

By earning an annual interest, the amount of money that can be earned after n years is calculated through the equation,
F = P x (1 + r)^n
Substituting the known values,
2,000 = 500 x (1 + 0.06)^n
The value of n from the equation above is 23.79 or approximately 24 years.