Answer:
25 years
Step-by-step explanation:
Assuming the interest is simple interest, the amount of it is given by ...
I = Prt . . . . . interest on principal P at rate r for t years
You want to find t such that I = P: the amount of interest is equal to the principal.
500 = 500(0.04)(t) . . . . put the known values into the formula
500/20 = t = 25
It will take 25 years for the investment to double.
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Additional comment
If interest is compounded annually, the account value is ...
A = P(1 +r)^t
For A = 2P, this becomes ...
2 = (1 +0.04)^t
t = log(2)/log(1.04) ≈ 17.7
It would take about 17.7 years for the investment to double if interest is compounded annually.
