A certain amount of money is invested at a compound interest rate of 10% per ann

A certain amount of money is invested at a compound interest rate of 10% per annum. How long will it take for the investment to double?

A certain amount of money is invested at a compound interest rate of 10% per annum. How long will it take for the investment to double?

Step 1: Understand that we want to find out how long it takes for an investment to double.
Step 2: Know that the interest rate given is 10% per year.
Step 3: Use the Rule of 72, which is a quick way to estimate the time to double an investment.
Step 4: The formula for the Rule of 72 is: time (in years) = 72 divided by the interest rate.
Step 5: Plug in the interest rate: time = 72 / 10.
Step 6: Calculate the result: 72 divided by 10 equals 7.2.
Step 7: Conclude that it will take approximately 7.2 years for the investment to double.

Compound Interest – Understanding how compound interest works and how it affects the growth of an investment over time.
Rule of 72 – A simplified formula to estimate the number of years required to double an investment at a fixed annual rate of return.