To find the number of years an initial capital will double, we use the following approximation:
Number of years needed to double a capital = 70/interest rate (without the %)The rate being 5, Number of years = 70/5 = 14 years,
Proof: (Remember te formula of compound interest A = P(1+interset)ⁿ
1200 = 600(1+5%)ⁿ1200/600 = (1.05)ⁿ2= (1.05)ⁿln(2) = (n)ln(1.05)0.693147181 = (n)(0.048790164)
n= 0.693147181/0.048790164n= 14.26 years ≈ 14 years
