finance

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Suppose you pay $1000 into a savings account that pays 2% per year, compounded annually. How many years will would it take for the money in the account to double, to $2000? use "successive approximation."

  • finance -

    P = Po(1+r)^n.

    P = 1000(1.02)^n = 2000
    1.02^n = 2
    n*Log 1.02 = Log 2
    n = Log 2/Log 1.02 = 35 Compounding periods.

    35Comp / 1Comp/yr = 35 Yrs. To double.

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