Using the Rule of 72, at what rate of interest compounded annually will an investment double...

Question

Question

Using the Rule of 72, at what rate of interest compounded annually will an investment double in five years?

Using the exact formula, at what rate of interest compounded annually will an investment double in five years?

business economics

Answer 1

Answer #1

Q1
Answer
Option B

Interest rate =72/years=72/5
=14.4%
the interest rate to double the amount in 5 years is 14.4%
---
Q2
ANswer

the exact formula for the interest rate to double the amount is
i=2^(1/n) -1
n=5
i=2^(1/5) -1
i=0.148698355
i=14.87%

the exact interest rate is 14.87%
option D

Answer 2

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