Question

What annual rate of interest compounded annually doubles an investment in 7 years Given the
2 1/7 = 1.104090.​

Answer 1

Answer:

10.29%

Step-by-step explanation:

We can use the rule of 72.

$doubling \: period = \frac{72}{rate}$

Here the number of years to double = 7

$rate \: = \frac{72}{7} = 10.29$

Rate that doubles in 7 years = 10.29% per annum.

Answer 2

Answer:

You can calculate this by a simple formula called the rule of 72 !

If you want to double your money in ‘n’ years, just divide ‘n’ into 72 to find the required interest rate. r=72/y ; where r=rate of interest and y=no of years

This this case since we are looking at 7 years: r= 72/7 ; y=7years

72/7= 10.3%

So you will need an annual rate of 10.3% to double your investment in 7 years!

Similarly by working it backwards you can find the number of years required to double your investment at a certain rate of interest then the formula is :

y=72/r ; where y=no of years and r=rate of interest

Hope this helps :)