If you deposit money today into an account that pays 6.5 percent interest, how long will it take for the money to double.

Is it simple interest or compounded interest?

An easy way to estimate this is to use the "rule of 72." Assuming compounding as in most financial investments, divide 72 by the interest rate percent to get an approximation of how many years the account takes to double in value. In this case 72 divided by 6.5 gives approximately 11 years.

The harder way is to work out a formula.

Say you start with 1 dollar, and you get 6.5% interest per year.

so each year, you multiply what you have in the account by 1.065

so year 0 you have $1, year 1 you have $1*1.065, year 2 you have $1*1.065*1.065

Now we see that we can turn this into a pattern: where n is the number of years.

Now you want 2 dollars at the end of the day, so you need to solve

Are you studying logarithms? Can you solve this for n?

Quote:

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Originally Posted by dionte01

If you deposit money today into an account that pays 6.5 percent interest, how long will it take for the money to double.

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what is the future value of a 5-year annuity due that promises to pay you $300 each year? Assume that all payments are reinvested at 7 percent a year, until year 5.

If you deposit money today into an account that pays 6.5 percent interest, how long will it take for the money to double

AN2 - your most recent question has already been asked and answered. As for your previous post, (1) looks like a homework problem to me, so please tell us where you are having difficulty, and (2) you should not tag a new question onto an existing thread - start a new question.

Hello:

Is there an echo in here?

excon