Question

Using the Rule of 70, what approximate interest rate would be needed for an investment

of $14,000 to double by the end of 32 years?

A22.49
B 45.7%
C 2.19%

Answer 1

Using the Rule of 70, the approximate interest rate that would be needed for an investment of $14,000 to double by the end of 32 years can be calculated as follows:

The formula for the Rule of 70 is:

Number of years to double = 70 / interest rate (as a decimal)

Solving for the interest rate:

interest rate (as a decimal) = 70 / number of years to double

So, if you want to double your investment in 32 years, you can plug in the number of years:

interest rate (as a decimal) = 70 / 32

interest rate (as a decimal) = 2.188

Converting this decimal to a percentage, the interest rate would be approximately 2.19% (rounded to two decimal places). So, the answer is C: 2.19%.