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If You Deposit Money Today In An Account That Pays 6.5% Annual Interest How Long Will It Take To Double?

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jay jerome Profile
jay jerome answered
I'll derive the formula for you, and give an example in which your deposit is compounded monthly.

D = deposit
y = number of years deposited
t = number of times compounded annually
A = 6.5 %
r = A / t
ty = number of periods compounded
D ( 1 + r ) ty = 2D

   (1 + r )ty   = 2

ln ((1 + r )ty) = ln (2)

ty ln(1 + r ) = ln (2 )

ty = [ln(2)] / [ln (1 + r)]

ty = [ ln(2) ] / [ ln ( 1 +( 0.065/12) )]

ty = 128.31

It will take 128.31 months for you deposit to double if compounded monthly.
After 129 months you will more than double your deposit.

If your deposit is compounded differently ( daily, quarterly or annually) make the necessary
substitutions to get the results you're looking for.

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