Respuesta :
If you earn 7% interest per year on your bank account, it will take 11 years to double the $100 to $200.
Given,
Interest rate = 7%
Future Value (FV) = $200
Present Value (PV) = $100
It is calculated below-
Year 1: 100 × 1.07 = 107.00
Year 2: 107 × 1.07 = 114.49
Year 3: 114.49 × 1.07 = 122.50
Year 4: 122.50 × 1.07 = 131.07
Year 5: 131.07 × 1.07 = 140.25
Year 6: 140.25 × 1.07 = 150.07
Year 7: 150.07 × 1.07 = 160.57
Year 8: 160.57 × 1.07 = 171.81
Year 9: 171.81 × 1.07 = 183.84
Year 10: 183.84 × 1.07 = 196.71
Year 11: 196.71 × 1.07 = 210.47
Estimating the length of time it takes for an investment to grow in value is helpful for the investor. Compounding interest is when the value of an asset grows by calculating interest earned on top of the principal and any accumulated interest, in your bank account.
Hence, it will take 11 years to double the $100 to $200.
To learnt more about interest here:
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