How long will it take $1,000 to double itself if it is invested at 5% simple interest?
A) 20 years
B) 25 years
C) 24 years
D) 10 years

Question

Quizplus · Accepted Answer

Simple interest is calculated using the formula $I = P \times r \times t$, where $I$ is the interest, $P$ is the principal amount, $r$ is the rate of interest per period, and $t$ is the time. To double the principal, the interest earned must equal the principal, so $I = P$. Given $P = $1,000$ and $r = 5\% = 0.05$, we solve for $t$ in $1000 = 1000 \times 0.05 \times t$, which gives $t = 20$ years.

How Long Will It Take $1,000 to Double Itself If