8. How long will it take $5,000 to double in an account that pays 5.6% simple...

Question

Question

business finance

Answer 1

Answer #1

Simple interest :

A = P * ( 1 + rt )
Here, A = Amount at the time of maturity = 10000
P = Principal amount = 5000
r = 5.6% = 0.056
t = Period in years

10000 = 5000 * ( 1 + 0.056*t )
10000/5000 = 1 + 0.056t
2 = 1 + 0.056*t
0.056t = 2 - 1
0.056t = 1
t = 1 / 0.056	18	years

Answer 2

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