what rate of interest compounded semi annually needed to double an investment in 5 year ? please solve question with log then antilog when values come.
Answers
9 times is the correct answer
Answer:
The Rule of 72 is a quick, useful formula that is popularly used to estimate the number of years required to double the invested money at a given annual rate of return.
While calculators and spreadsheet programs like Microsoft's Excel have inbuilt functions to accurately calculate the precise time required to double the invested money, the Rule of 72 comes in handy for mental calculations to quickly gauge an approximate value. Alternatively, it can compute the annual rate of compounded return from an investment given how many years it will take to double the investment.
KEY TAKEAWAYS
The Rule of 72 is a simplified formula that calculates how long it'll take for an investment to double in value, based on its rate of return.
The Rule of 72 applies to compounded interest rates and is reasonably accurate for interest rates that fall in the range of 6% and 10%.
The Rule of 72 can be applied to anything that increases exponentially, such as GDP or inflation; it can also indicate the long-term effect of annual fees on an investment's growth.
The Formula for the Rule of 72
\begin{aligned} &\text{Years to Double} = \frac{ 72 }{ \text{Interest Rate} } \\ &\textbf{where:}\\ &\text{Interest Rate} = \text{Rate of return on an investment} \\ \end{aligned}
Years to Double=
Interest Rate
72
where:
Interest Rate=Rate of return on an investment