Doubling Investment

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If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately years. If Chris invests $1,000 in a bond that pays 4 percent interest, compounded annually, what will be the approximate total amount of the investment 35 years later?

Review: Doubling Investment


Explanation

This question gives us a doubling formula and then some information to use it. The doubling time is and we are given , so the time to double is years. We start with $1,000. It doubles to $2,000 in 17.5 years. In the next 17.5 years, it doubles to $4,000. The answer is (A).The doubling formula is handy to know, but notice that we were not expected to know it - it was given to us, and we were expected to know how to use it.

Again, the correct answer is (A).


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