Wednesday, November 18, 2009
You always hear that at a 7% interest rate your money doubles every 10 years. At 10 %, your money doubles in 7 years. But what about money earning 5% or 6% interest per year? The calculation is very simple if you have a calculator with an ln key: enter ln(2)/0.05 for 5% or ln(2)/0.06 for a 6% interest rate. How long will it take for the investment to triple? Try ln(3)/0.07 for a 7% interest rate; it takes 15.7 years to triple.