00:01
Okay, here i use the growth formula.
00:03
In the simplest form is this.
00:04
Pn equals p0, 1 plus r over 100, power of n.
00:12
R is the interest rates, n number of time periods, and you change r and n to fit the compounding.
00:19
So, i want to work out time taken to double the money.
00:24
In other words, $5 ,000 becomes $10 ,000.
00:27
So pn is the end amount, that's $10 ,000.
00:32
P0, starting amount is $5 ,000, 1 plus.
00:37
Now r is 7 % per year, but i'm compounding quarterly every three months.
00:44
So to get the rate per quarter is divided by 4.
00:47
So 7 divided by 4 is the rate per quarter over 100.
00:52
And n i want to find.
00:54
The n is number of quarters, not number of years yet.
00:57
So, r and n both change with the compounding.
01:03
This quarterly i divide r by 4 and the n has to be quarters.
01:09
So this becomes, well, the first step divide both sides by 5 ,000.
01:14
So 2 is going to be, and then if i take 7 divided by 4, divided by 100, i get 0 .1175...