New Savings Bank pays 2% interest on its deposits. If you deposit $1,800 in the bank and leave it there, will it take more or less than 50 years for your money to double? You should be able to answer this without a calculator or interest rate tables.

Question

Mahoney

Business

14 July, 04:28

New Savings Bank pays 2% interest on its deposits. If you deposit $1,800 in the bank and leave it there, will it take more or less than 50 years for your money to double? You should be able to answer this without a calculator or interest rate tables.

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Answers (1)

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Ximena · Answer 1

The money would take less than 50 years to double.

Explanation:

In this case we would receive simple interest on this deposit then the growth in investment after 50 years would be 50 x 2% = 100%

Therefore the money would double

In case of compound interest since the interest is earned on the interest received and so it would take lessor time than simple interest for the money to be double

Therefore the money would take less than 50 years to double