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  • Nov 8, 2018, 11:08 PM
    padmasha1988120
    Compund interest
    Anyone can help me to solve it?

    At a certain fixed rate of compound interest per annum, how long it takes to generate an investment of 1 to n? Assume that only one amount is invested at the beginning of the time and no withdrawal is allowed.
  • Nov 9, 2018, 02:18 PM
    ebaines
    The basic formula is:

    FV = PV(1+i)^n

    Not sure what you mean by "generate an investment of 1 to n" - please clarify. But if you know the ratio of future value to present value, and if you know the rate of interest 'i', you can calculate the time required in years 'n' by rearranging the above equation and taking the logarithm of both sides. Example: to double your investment you have FV/PV = 2, and the above equation yields:

    2 = (1+i)^n

    Take the log of both sides:

    log(2) = n log(1+i)

    Rearrange:

    n = log(2)/log(1+i)

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