Question

How long will it take you to double an amount of $500 if you invest it at a rate of 4% compounded monthly?

Answer 1

Number of year = 17 year 4 month (Approx.)

Explanation:

Given:

Current amount = $500

Future amount = 2 x 500 = $1,000

Rate of interest = 4%

Find:

Number of year

Computation:

Rate [Monthly] = 4% / 12 = 0.00333

Total time = 12 x n = 12n

A = P[1+r]¹²ⁿ

1000 = 500[1+0.003333]¹²ⁿ

2 = [1+0.003333]¹²ⁿ

2 = [1.003333]¹²ⁿ

Number of year = 17.358

Number of year = 17 year 4 month (Approx.)