How long will it take for prices to double if the rate of inflation is 25 %per annum
The sum of 80 dollars is saved in an account which gives 9 and half per annum compound interest, find the amount after 2 years
2 = 1.25^n
log 2 = n * log 1.25
n = 0.301/0.0969 = 3.1
not long :(
per the usual formula, the amount would be
80(1 + 0.095)^2
To calculate the amount of time it will take for prices to double with a given rate of inflation, we can use the rule of 72. The rule of 72 states that you can estimate the time it takes for an investment or a value to double by dividing 72 by the annual growth rate. In this case, the growth rate is the rate of inflation, which is 25% per annum.
So, to calculate the time it takes for prices to double with a 25% annual inflation rate, we divide 72 by 25:
Time = 72 / 25 = 2.88 years
Therefore, it will take approximately 2.88 years for prices to double with a 25% per annum inflation rate.