Question

How many years will it take for $2000 to double at a simple annual interest rate of 8%

Answer 1

Consider the provided information.

The amount invested is 2000.

Double the amount means: 2000×2 = 4000

We had invested only 2000 and we are getting 4000. That means simple interest is 2000.

Now use the simple interest formula:

`S= (P×R×t)/(100)`

Where, S is the simple interest, P is the principal amount, R is the rate and t is the time.

Substitute the respective values in the above formula.

`2000 = (2000 * 8 * t)/(100)`

`t = (100)/(8)`

`t = 12.5`

Hence, it would take 12.5 years to double the amount.

Answer 2

• 25 years

Explanation:

Given:

• Initial amount P = $2000
• Interest rate r = 8% = 0.08 simple
• Final amount A = 2P = $4000
• Time t = ?

Use simple interest formula to work out the time:

• A = Prt
• 4000 = 2000*0.08t
• 2 = 0.08t
• t = 2 / 0.08
• t = 25