Question

You invest $270 in a mutual fund today that pays 9.00 percent interest annually. How long will it take to double your money? (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to 0 decimal place, e.g. 545)

Answer 1

Answer:

Amount will be doubled in 8 years.

Step-by-step explanation:

Since $F=I(1+r)^{n}$

where F = final amount

I = initial amount or amount invested

r = rate of interest $(\frac{r}{100})$

n = Duration of investment in years

Now it has been given in the question

F = 270×2 = $540

I = $270

r = 0.09

We plug these values in the formula to get the value of n

$540=270(1+0.09)^{n}$

$\frac{540}{270}=(1.09)^{n}$

By taking log on both the sides

$log(2)=log(1.09)^{n}$

$log(2)=nlog(1.09)$

n = $\frac{log2}{log1.09}$

  = $\frac{0.30103}{0.03743}$

  = 8.04

  ≈ 8 years