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    RWASH49's Avatar
    RWASH49 Posts: 1, Reputation: 1
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    #1

    Apr 29, 2008, 05:10 PM
    Financial management
    If you deposit money today in a account that pays 6.5 percent annual interest, how long will it take to double your money?
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #2

    Apr 29, 2008, 05:17 PM
    I have moved your post from forum to the investing area where you may get more help.

    I will have to assume this is a homework question, since there are no accounts paying 6.5 any longer.
    DrJ's Avatar
    DrJ Posts: 1,328, Reputation: 339
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    #3

    Apr 29, 2008, 05:20 PM
    About 11 years and a few days by my calculations...
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #4

    Apr 30, 2008, 06:29 AM
    A good way to estimate this is to use the "rule of 72." Divide 72 by the interest rate (in percent)) and you get the approximate number if years it takes your investment to double. Here 72/6.5 = 11.08 years.

    The more precise way is to solve the following equation for n:

    (1+i)^n = 2

    You can solve this using logarithms, and you get DrJ's answer.
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