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You deposit $200 in an account that doubles in 10 years. How many years will it...

You deposit $200 in an account that doubles in 10 years. How many years will it take the account to be reduced to its original value if it loses 25 percent per year?

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Answer #1

Answer:

Deposit of $200 in an account doubles in 10 years.

The doubled amount = PV = $400

Annual decline = 25%

Original value = FV = $200

Using nper function of excel:

NPER (rate, pmt, pv, fv, type)

= NPER(-25%,0, -400, 200, 0)

= 2.4094

= 2.41 Years

Years it will take the account to be reduced to its original value = 2.409421 = 2.41 years

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