Asked by Brianna
I would like my investment to double in value every 3 years. At what rate of interest would I need to invest it, assuming the interest is compounded continuously?
Answers
Answered by
Maria
google "rule of 72"
Answered by
Steve
or, use the compound interest formula
A(t) = Pe<sup>rt</sup>
we want the amount to double in three years.
2P = Pe<sup>3r</sup>
2 = e<sup>3r</sup>
ln 2 = 3r
r = ln2/3 = 0.231
so, the rate is 23.1%
The rule of 72 would give 24%, which is pretty close.
A(t) = Pe<sup>rt</sup>
we want the amount to double in three years.
2P = Pe<sup>3r</sup>
2 = e<sup>3r</sup>
ln 2 = 3r
r = ln2/3 = 0.231
so, the rate is 23.1%
The rule of 72 would give 24%, which is pretty close.
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