Question

Use the approximate doubling time formula for the case described below. Discuss whether the formula is valid for the case described.Gasoline prices are rising at a rate of 0.6% per month. What is their doubling time?

Answer 1

Step-by-step explanation:

Given the rising rate of 0.6% per month, we can go ahead and determine the doubling time as seen below;

`\begin{gathered} P=P_0(1+r)^t \\ \\ (P)/(P_0)=(1+0.006)^t \\ \\ 2=1.006^t \\ \\ \ln2=t\ln1.006 \\ \\ t=(\ln2)/(\ln1.006) \\ \\ t=115.87\text{ months} \end{gathered}`