How many years will it take for $2000 to double at a simple interest rate of 8%? Explain how you found your answer.
It said, at a simple interest of 8%.
So you are generating $2000 interest in order to double your investment
I = PRT
2000 = 2000(.08)t
t = 12.5
Notice that this differs quite a bit from the answer oobleck obtains using
compound interest.
The "rule of 72" applies to compound interest.
sorry. my bad. Way to watch, Reiny.
To find out how many years it will take for $2000 to double at a simple interest rate of 8%, we can use the formula for simple interest:
A = P(1 + rt)
Where:
A is the final amount (double the initial amount)
P is the principal amount (initial amount)
r is the interest rate
t is the time period in years
In this case, we know that A is double the initial amount, so A = 2P. We can substitute these values into the formula:
2P = P(1 + rt)
Now we can solve for t:
2 = 1 + 0.08t
By rearranging the equation, we get:
0.08t = 1
Solving for t:
t = 1 / 0.08
t = 12.5
So, it will take approximately 12.5 years for $2000 to double at a simple interest rate of 8%.
just find t such that 1.08^t = 2
The starting amount does not matter.
Just FYI, read up on "The Rule of 72."