Answer:
It will double in the year 2063
Explanation:
Let the amount deposited be $x, when it doubles, the amount becomes $2x
we can use the compound interest formula to know when this will happen
The compound interest formula is as follows;
A = P(1+r/n)^nt
In this question,
A is the amount which is 2 times the principal and this is $2x
P is called the principal and it is the amount deposited which is $x
r is the interest rate which is 3.2% = 3.2/100 = 0.032
n is the number of times compounding takes place per year which is quarterly which equals to 4
t is the number of years which we want to calculate.
Substituting all these into the equation, we have;
2x = x(1+0.032/4)^4t
divide through by x
2 = (1+ 0.008)^4t
2 = (1.008)^4t
we use logarithm here
Take log of both sides
log 2 = log (1.008)^2t
log 2 = 2t log 1.008
2t = log 2/log 1.008
2t = 86.98
t = 86.98/2
t =43.49 which is 43 years approximately
Thus the year the money will double will be 2020 + 43 years = 2063