187k views
5 votes
In how many years a sum of money doubles at the rate of 8%?​

User Asa Ayers
by
7.3k points

1 Answer

4 votes

Answer:

about 9 years

Explanation:

You want to know the doubling time for money earning an interest rate of 8%.

Rule of 72

The rule of 72 tells you the doubling time is about ...

72/(interest rate %) = 72/8 = 9 . . . . years

The sum will double in about 9 years.

__

Additional comment

The actual period will depend on the way interest is compounded. When compounded annually, the time is ...

log(2)/log(1.08) ≈ 9.01 . . . years

Compounded monthly, the time is ...

log(2)/(12·log(1 +.08/12)) ≈ 8.69 . . . years

User Robert Muil
by
8.1k points