Question

Time to accumulate a given sum personal finance problem manuel rios wishes to determine how long it will take an initial deposit of ​$12 comma 00012,000 to double.

a. if manuel earns 1313​% annual interest on the​ deposit, how long will it take for him to double his​ money?

b. how long will it take if he earns only 1010​% annual​ interest?

c. how long will it take if he can earn 1515​% annual​ interest?

d. reviewing your findings in parts a​, b​, and c​, indicate what relationship exists between the interest rate and the amount of time it will take manuel to double his money.

a. if manuel earns 1313​% annual​ interest, the amount of time to double his money is nothing years. ​ (round to two decimal​ places.)

Answer 1

To calculate how long it takes an investment to double, use the "Rule of 72." Simply divide 72 by the interest rate to find the number of years.

a) 72/13= 5.54 years

b) 72/10= 7.2 years

c) 72/15= 4.8 years

d) The above answers show that the higher the interest rate, the shorter time it will take to double the money.