SOLVED:(a) How long will it lake an investment to double in value if the interest rate is 6% compounded continuously? (b) What is the equivalent annual interest rate?
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SOLVED: The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself. You want to double your initial investment of 5,000. You put your money in a high yield interest-bearing account earning 6% per year. How long will it take to double your money?
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