Solved Question: If you invest at 0.03 APY or 3.0%, how many years will it take

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Question:

If you invest at 0.03 APY or 3.0%, how many years will it take to turn $1 into $8?

Answer:

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

Hence

8=1(1.03)^n

8=(1.03)^n

Taking log on both sides;

log 8=n*log 1.03

Hence n=log 8/log 1.03

which is equal to

=70.35 years (Approx)

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