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What is the rate on an investment that doubles $5051 in 9 years? Assume interest is compounded quarterly.

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Answer:

The rate at which the investment gets double is 7.776

Explanation:

Given as :

The principal investment = $ 5051

The time period of investment = 9 years

Let The rate of interest = R % compounded quarterly

The Amount gets double

So, From Compounded method

Amount = Principal ×
(1+(rate)/(4* 100))^(4* Time)

Or, 2 × P = P × ( 1 +
(\textrm R)/(400))^(\textrm 36)

Or, 2 = ( 1 +
(\textrm R)/(400))^(\textrm 36)

Or,
2^{(1)/(36)} = 1 +
(\textrm R)/(400)

or, 1.01944 - 1 =
(\textrm R)/(400)

or, 0.01944 =
(\textrm R)/(400)

∴ R = 0.01944 × 400 = 7.776

Hence The rate at which the investment gets double is 7.776 Answer

User Adriano Martins
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