How long will it take for a sum of money, invested at 5% compounded annually, to double in value?
Mathematics · College · Thu Feb 04 2021
Answered on
To calculate how long it will take for a sum of money to double when invested at a certain interest rate compounded annually, you can use the Rule of 72. This is a simple way to estimate the number of years required to double the invested money at an annual compounded interest rate.
According to the Rule of 72, you divide 72 by the interest rate to estimate how many years it will take to double your money. In this case, the interest rate is 5%.
So you would do the following calculation: 72 / 5 = 14.4 years
Therefore, it will take approximately 14.4 years for a sum of money to double at a 5% interest rate compounded annually.