Bob has $2,500 invested in a bank that pays 6% annually. How long will it take for his funds to double:
Here we want to calculate the time it will take for the invested amount to be doubled.
Mathematically:
t = ln(future value/ Present value)/ln(1 + rate)
From the question:
Future value = 2 * invested amount = 2 * 2500 = $5,000
Present value = $2,500
Rate = 6% = 6/100 = 0.06
Substituting these values:
t = ln(5000/2000)/ln (1 + 0.06)
t = ln2/ln1.06
t = 11.90 years
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