Question

The time in years, t, it takes a savings account to double its value can be found using the equation shown below, where r represents the interest rate expressed as a decimal.



t
=
ln
2
r

If a savings account pays 4% annual interest, approximately how many years will it take for the account to double in value?

Answer 1

t = ln 2 / r = ln 2 / 0.04 ≈ 0.693147 / 0.04 ≈ 17.33 years.

So about 17.3 years (roughly 17 years and 4 months).