If you can earn 8 percent annual return on your investments, how long does it take...

Question

Question

If you can earn 8 percent annual return on your investments, how long does it take to quadruple (4 times) your investments?

Answer 1

Answer #1

Solution :

Let's suppose our investent = X

Final value = 4X ( 4 times the investment )

Interest rate = 8% per annum

Using Future value formula

Final value = initial investment * ( 1+interest rate) ^ year

4X = X * ( 1+8%) ^ year

1.08 ^ year = 4

Taking log both side

log ( 1.08^ year ) = log 4

Year * log 1.08 = log 4

Year = log 4 / log 1.08 = 0.602/0.0334 = 18

So correct answer is 18 years

Answer 2

Similar Homework Help Questions

If you earn an annual interest rate of 10.3 percent, how many years will it take...

If you earn an annual interest rate of 10.3 percent, how many years will it take to quadruple your money?
If you earn an annual interest rate of 10.3 percent, how many years will it take...

If you earn an annual interest rate of 10.3 percent, how many years will it take to quadruple your money? 14.14 years 13.05 years 12.86 years 11.31 years 12.37 years
If you earn a 4% annual return on your retirement account each year, how long will it take the current account balance t...

If you earn a 4% annual return on your retirement account each year, how long will it take the current account balance to double if you don't make any additional deposits to the account? A. 9 years B. 18 years C. 36 years D. 72 years

At 3.36 percent interest, how long does it take (in years) to quadruple your money? Answer...

At 3.36 percent interest, how long does it take (in years) to quadruple your money? Answer to two decimals.
Question 10 4 pts At 10 percent interest, how long does it take to quadruple your...

Question 10 4 pts At 10 percent interest, how long does it take to quadruple your money? 14.33 years 14.55 years 15.11 years 15.36 years
At 9.25 percent interest, how long does it take to double your money? (Do not round...

At 9.25 percent interest, how long does it take to double your money? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) At 9.25 percent interest, how long does it take to quadruple your money? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

At 6.1 percent interest, how long does it take to double your money? (Do not round...

At 6.1 percent interest, how long does it take to double your money? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years At 6.1 percent interest, how long does it take to quadruple it? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
At 7.4 percent interest, how long does it take to double your money? (Do not round...

At 7.4 percent interest, how long does it take to double your money? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years At 7.4 percent interest, how long does it take to quadruple it? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years
At 5.5 percent interest, how long does it take to double your money? (Do not round...

At 5.5 percent interest, how long does it take to double your money? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years At 5.5 percent interest, how long does it take to quadruple it? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years

At 6.9 percent interest, how long does it take to double your money? (Do not round...

At 6.9 percent interest, how long does it take to double your money? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years At 6.9 percent interest, how long does it take to quadruple it? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Length of time years