How oong will it take $20,000 earning 3.5% annual interest to double in value?
To determine how long it will take for $20,000 to double in value with an annual interest rate of 3.5%, we can use the rule of 72.
The rule of 72 is a simple formula that provides an estimate of the time it takes for an investment to double. It states that by dividing 72 by the annual interest rate, you can obtain an approximate number of years needed for the initial investment to double.
In this case, the annual interest rate is 3.5%. So, to find the number of years needed, we divide 72 by 3.5.
72 ÷ 3.5 ≈ 20.57
Therefore, it will take approximately 20.57 years for $20,000 to double in value with a 3.5% annual interest rate.
Please note that the rule of 72 provides only an estimation and may not be entirely accurate in all cases. It assumes compound interest and does not account for factors like taxes or fees. For precise calculations, it is advisable to use financial calculators or consult with a financial professional.
assuming simple interest, then it will take t years, where
1+.035t = 2
if compound annual interest, then
1.035^t = 2
The actual amount invested does not matter