Question

If you deposit money today in an account that pays 12% annual interest, how long will it take to double your money? Round your answer to two decimal places.

Answer 1

Suppose the PV is $\$$ 100 so the FV must be $\$$ 200.

As we know: FV = PV $\times$ (1 + I/Y)^N

$\$$ 200 = $\$$ 100 $\$$ (1.12)^N

N = 6.12 years would be required to double the investment that pays 12% annual interest