Question

In how many years will a sum of $20,000 at least double itself, if the rate of compound interest is 10% per annum?​

Answer 1

Step-by-step explanation:

Time is 10 years

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Answer 2

Concept

The formula relating between the rate of interest annually and time period is given as,

A = P(1 + rt), where A is the final amount, P is the balance, r is the rate of interest in p.a. and t is the time period. We will use the given data into the above equation to calculate the value of time period t.

Given

P = $20,000

A = $40,000

r = 10 %

Find

We have to calculate the value of t from the given data.

Solution

Since, A = P(1+rt)

Therefore, 40,000 = 20,000(1 + 0.1t)

2 = 1 + 0.1t

t  = 10 years

Hence to increase the amount by double it will take 10 years with an interest rate of 10 %.

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