In how many years will money double at 8% compounded yearly?
A) 0.09 years
B) 0.9 years
C) 9.01 years
D) 90.1 years
E) 2 years

Question

Quizplus · Accepted Answer

The formula for compound interest is A=P(1+r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years.

In this case, we want to find the number of years it takes for the money to double, so we can set A=2P and simplify the formula to:

2P=P(1+0.08/1)^(1t)

Dividing both sides by P and taking the natural logarithm of both sides, we get:

ln(2)=tln(1.08)

t=ln(2)/ln(1.08)≈9.01 years

Therefore, the answer is C) 9.01 years.

In How Many Years Will Money Double at 8% Compounded