Problema Solution
how long will it take money to double if it is invested at 7% compounded daily?
Answer provided by our tutors
In the formula below, i is the effective interest rate per period. FV and PV represent the future and present value of a sum. n represents the number of periods.
therefore, to double FV = 2 PV
therefore 2 PV = PV ( 1 + i )^n
therefore 2 = ( 1 + i )^n
Applying log on both sides,
log2 = log( 1 + i )^n
n = (log2)/ log(1+i)
Given i is 7%
Therefore n = log2/log1.07 = 10.245 days