Question

For each growth rate below, use the rule of 70 to calculate how long it will take incomes to double. Instructions: Round your answers to one decimal place. Years for incomes to double a. 2.8 percent b. 4.6 percent c. 6.3 percent d. 7.8 percent e. 8.9 percent

Answer 1

Check Explanation

Explanation:

In finance, the rule of 70 estimates how long incomes take to double.

(Number of years it takes for income to

double) = 70/(annual percentage growth rate)

a) At 2.8%

N = (70/2.8) = 25.0 years

It will take 25.0 years for incomes to double.

b) At 4.6%

N = (70/4.6) = 15.2 years

It will take 15.2 years for incomes to double.

c) At 6.3%

N = (70/6.3) = 11.1 years

It will take 11.1 years for incomes to double.

d) At 7.8%

N = (70/7.8) = 9.0 years

It will take 9.0 years for incomes to double.

e) At 8.9%

N = (70/8.9) = 7.9 years

It will take 7.9 years for incomes to double.