If money is invested at r percent interest, compounded annually, the amount of investment will double in approximately 70/r years. If Pat's parents invested $ 8000 in a long term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of investment 18 years later, when Pat is ready for college?
Choose the correct choice from the following choices: A) $20000 B) $15000 C) $32000 D) $10000 E) $9000
Since investment doubles in 70/r years then for r=8 it'll double in 70/8=~9 years (we are not asked about the exact amount so such an approximation will do). Thus in 18 years investment will double twice and become ($8,000*2)*2=$32,000 (after 9 years investment will become $8,000*2=$16,000 and in another 9 years it'll become $16,000*2=$32,000).   Answer: $32000.
<result>C</result>
If money is invested at r percent interest, compounded annually, the amount of investment will double in approximately 70/r years. If Pat's parents invested $ 8000 in a long term bond that pays 8 percent interest, compounded annually, what will be the approximate total amount of investment 18 years later, when Pat is ready for college?