Imagine that you have $100 of ill-gotten gains stashed in an offshore bank account. Lest the IRS get too nosey, you plan to leave that account idle until your retirement in 45 years.
a. If your bank pays you 3% annual interest, what will your account balance be upon retirement?
b. If your bank pays you 6% interest, what will your account balance be upon retirement?
c. Does doubling the interest rate double your accumulated balance at retirement? More than double it? Less? Explain your answer.