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You deposit $5,000 in a savings account that earns 8% simple interest per year. What is the minimum number of years you must wait to double your balance?
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You deposit $5,000 in a savings account that earns 8% simple interest per year. What is the minimum number of years you must wait to double your balance?

User Oleksandr B
by
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1 Answer

6 votes

Answer:

It will take 12.5 years double the balance

Step-by-step explanation:

As we know

A = P (1 + rt)

where A is the amount

P is the principal sum of money deposited

r is the rate of interest (per annum)

t is the time in years

Substituting the given values we get -

2P = P ( 1+ 0.08 * t)

2 = 1+ 0.08 * t

1 = 0.08 * t

t =


(1)/(0.08) \\(100)/(8) \\12.5 years

User Saeid Mirzaei
by
3.0k points
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