Question

Finance:
if given the equation: y=12000(1.07)^x
a)Estimate the time it will take to double using the rule of 72
b)determine the time it takes for the investment to double useing the fuction

Answer 1

If I recall the rule of 72, said that
rate x number of years = 72
a) so 7x = 72
x = 10.28 ----> time is 10.28 years

b)
24000 = 12000(1.07)^x
1.07^x = 2
log both sides
log (1.07^x) = log 2
x log 1.07 = log 2
x = log2/log1.07 = 10.24 years