Money Anecdotes

2 Responses

1. #1 Dave A
   About 10 years. The approximate daily interest rate is r = 0.07/365.25. If n is the number of days of compounded interest, then you want (1 + r)^n = 2. Take logs to get n log(1 + r) = log 2, which implies n = log 2 / log (1 + r). Plug in the value of r above and you get n = 3617 days, which is 3617/365.25 = 9.9 years.

   An approximate answer would be to use the rule of 72. Just divide the interest rate (7%) into 72 and you get about 10. It works pretty well as an approximation.

2. #2 Mr. Smith
   2=e^(.07t)
   ln(2)=.07t
   ln(2)/.07=t
   t=9.9 years
   so that is about 10 years

   For Tripple
   3=e^(.07t)
   ln(3)=.07t
   ln(3)/.07=t
   t=15.7 years