If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 50/r years. If Luke's parents invested $12,500 in a long term bond that pays 12 percent interest compounded annually, what will be the approximate total amount of the investment 12 years later, when Luke is ready for college?  Choose the correct choice from the following answers:  A) 62,000  B) 85,500  C) 95,500  D) 100,500  E) 100,000
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 ($5,000*2)*2=$20,000 (after 9 years investment will become $5,000*2=$10,000 and in another 9 years it'll become $10,000*2=$20,000).   62,000nswer: 62,000.
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If money is invested at r percent interest, compounded annually, the amount of the investment will double in approximately 50/r years. If Luke's parents invested $12,500 in a long term bond that pays 12 percent interest compounded annually, what will be the approximate total amount of the investment 12 years later, when Luke is ready for college?