Question
2. A $5,000 investment has doubled to $10,000 in ten years. How much longer will it take for the investment to reach $15,000 if it continues to earn the same rate?
Answers
Steve
(1+r)^10 = 2.0
1+r = 2.0^0.1
r = 2.0^0.1 - 1
So, to grow by a factor of 1.5, will take
(1+r)^t = 1.5
2^.1t = 1.5
.1t = log1.5/log2
t = 10(log1.5/log2) = 5.85 years
Depending on when interest is posted, it could take up to 6 years to see the $15K
1+r = 2.0^0.1
r = 2.0^0.1 - 1
So, to grow by a factor of 1.5, will take
(1+r)^t = 1.5
2^.1t = 1.5
.1t = log1.5/log2
t = 10(log1.5/log2) = 5.85 years
Depending on when interest is posted, it could take up to 6 years to see the $15K