View Full Version : Time Value of Money
jancrous
Feb 27, 2008, 07:52 PM
If you deposit money today into an account that pays 6.5 percent interest, how long will it take for you to double your money?
morgaine300
Feb 27, 2008, 11:22 PM
First, people tend to get confused over the "double the money" part and not know how to put it into an equation. Just make something up, and then double it. Or just $1 and the $2 for the double. It doesn't matter about that part.
Is that the issue, and does that get you on your way?
If not, do you know if this is supposed to be compounding or not? And, are you using algebra or not?
ISneezeFunny
Feb 27, 2008, 11:56 PM
I'm assuming that the money is compounded annually.
P = principal interest
like morgaine says, do an example.
$100
after 1 year
$106.50
after 2 years
$113.4225
so on and so forth.
the actual formula can be found
Regular Compund Interest Formula (http://cs.selu.edu/~rbyrd/math/regular/)
hint: if you put in P amount, and you want to double it, the end product you want is 2P
... 2P or NOT 2P