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4 April, 03:45

You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 9 percent interest. Approximately how long must you wait for your investment to double in value?

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  1. 4 April, 03:49
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    The answer is 8 years

    Explanation:

    FV = PV (1+r) ^n

    Where

    PV = let's assume PV is $100

    FV = Since FV will be doubled, the we have $200 ($100 x 2)

    n=?

    r = 9percent

    Let us use the rule of 72 which states that an investment will double when:

    Annual Investment Rate x Number of Years = 72.

    Number of years = 72/9

    = 8 years

    The investment is doubled in 8 years at the rate of 9percent
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