Question

eBook How long will it take $600 to double if it earns the following rates? Compounding occurs once a year. Round your answers to two decimal places. a. 8%. year(s) 13 b. 13% 7.12 year(s) c. 17%. 5.67 year(s) d. 100% 1.00 year(s)

Answer 1

	FV =	Future Value
	PV =	Present Value
	r =	rate of interest
	n=	no of period
a)	FV/ PV =	(1 + r )^n
	1200 / 600 =	(1 + 8%)^n
	2 =	(1 + 8%)^n
	n =	9.01 years
b)	FV/ PV =	(1 + r )^n
	1200 / 600 =	(1 + 13%)^n
	2 =	(1 + 13%)^n
	n =	5.67 years
c)	FV/ PV =	(1 + r )^n
	1200 / 600 =	(1 + 17%)^n
	2 =	(1 + 17%)^n
	n =	4.42 years
d)	FV/ PV =	(1 + r )^n
	1200 / 600 =	(1 + 100%)^n
	2 =	(1 + 100%)^n
	n =	1.00 years