Description
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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