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30 June, 13:34

If you invest $100 into an account that earns 9% interest each year, how many years will it take for you to have $200?

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  1. 30 June, 14:01
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    It does not say simple or compound interest.

    Simple interest is rarely used these days, so assume compound.

    Use the standard formula:

    future value = present value * (1+rate/n) ^ (nt)

    n=number of times interest is compounded per year (=1)

    t=number of years

    Plugging values,

    200=100 (1.09) ^t

    1.09^t = 2

    take log

    t (log (1.09)) = log 2

    t=log (2) / log (1.09) = 0.6931/0.08618=8.04 years.
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