Question

if interest is compounded continuously ,at what annual interest rate will a principal of ₹ P double in 10 years​

Answer 1

Answer:

Apply the “Rule of 72” - Rate * Years = 72

Or, Rate = 72 / Years = 72/10 = 7.2% Ans.

More precise calculation : 2nd Method

Id Principle = P and Rate = r% then. P * ( ! + r/100) ^10 = 2P

Or, (1 + r/100 )^10 = 2P / P = 2

Or 1 + r/100 = 2 ^(1/10) = 2^0.1 = 1.0718

R = (1.0718 - 1) * 100 = 7.18% Ans.