How long will it take for an investment to double in value if interest is compounded quarterly?
An account earns interest of 6% per year. How long will it take for an investment to
double in value if interest is compounded quarterly?
Investment best answer:
Answer by michael
2A = 1A(1.015)^n will give the number of quarters for the money to double from 1A to 2A at 1.5% per quarter.
To solve divide by A then take the log of both sides.
2 = 1.015^n, log 2 = log 1.015^n. Use the property of logs to rewrite as log 2 = n*log 1.015.
Divide to solve for n. n = (log 2) / (log 1.015) = 46.555 quarters = 11.64 years.
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