Question

if a $1000 investment earns %20 interest compounded annually, then the investment will double in value in how many years?

Answer 1

Well 100% is 20%x4 so four years So no matter what number it would be 4 years

Answer 2

In four years.

Explanation:

End of first year:

1000 + 20%•1000 = 1000 + 200 = $1200

End of second year:

1200 + 20%•1200 = 1200 + 240 = $1440

End of third year:

1440 + 20%•1440 = 1440 + 288 = $1728

End of fourth year:

1728 + 20%•1728 = 1728 + 345.6 = $2073.6 >2•$1000