An investment that earns 4% interest will double in value about every 18 years.

Question

Some types of investments--such as Certificates of Deposit--earn interest based on a percentage rate. People often estimate the doubling time of investments to predict how much money the investment will be worth in the future. An investment that earns 4% interest will double in value about every 18 years. Use this information to complete the missing values in the table below for $2,500 invested at 4% interest.

Year             Value of Investment

 

2000                $2,500

   ?                   $5,000

   ?                   $10,000

 

2054                $20,000              

Answer 1

Taking the claim of doubling every 18 years as true, then the first unknown year must be 2018, since the $2500 doubled.

The next year )when doubling occurs again) thereafter would be 2036. Do you see why?