Question

The amount of money in an investment is modeled by the function A(t) = 500(1.0301). What is the doubling time for the investment? Round your answer to 2 decimal places.

Answer 1

23.26 years

Explanation:

To find the doubling time for an investment, you can use the Rule of 70, which is a quick and easy formula that works when the growth rate is small enough (less than about 0.15 per time interval). The formula is:

Doubling time = 70 / growth rate (as a percentage)

In your case, the investment has a growth rate of 3.01% per year, so the doubling time is:

Doubling time = 70 / 3.01 = 23.26 years

This means that it will take about 23.26 years for the investment to double in value from $500 to $1000.