Question

If you invest 5000 Swiss Francs

today in an investment that pays
3.25% per annum, compounded for the investment to double in
value, assuming no additional
withdrawals or deposits are
made?

Answer 1

22 years.

Explanation:

(continued), How long will it take the 5000 Swiss Francs to accrue to 10000 = 2 x 5000 Swiss Francs.

Define T as

T = the time to double the investment.

Then, we have that

10000 = 5000(1 + 3.25%)^T

2 = (1 + 0.0325)^T

2 = (1.0325)^T

ln(2) = ln [ (1.0325)^T ]

ln(2) = T ln (1.0325)

T = ln(2) / ln(1.0325)

T = 21.6723317643

T = 22 years, rounded to the nearest year.