Question

Manny has his money in a savings account earning 3 percent interest. How long will it take his money to double?

a. twelve years
b. two years
c. twenty-four years
d. eighteen years

Answer 1

The correct answer is c. twenty-four years

Explanation:

Let suppose Manny place 100 dollars in saving account, than 200 is double of it, so we can easily calculate how long will it take his money to double using growth rate formula.

Growth = (Future value/Present Value)^(1/n) -1

(we have to calculate n that is number of years)

3% = (200/100)^(1/n) -1

1.03 = 2^ (1/n)

Log 1.03 =1/n Log2

1/n = 0.0426

n = 1/0.0426

N= 23.5 years (aprox 24)