Asked by david

Jordan invests $100 and doubles her money in 8 years. Which operation illiterates the correct use of the rule 72 to estimate the annual interest rate

72x8
8+72x8
72/100
100/8

I put 8+72x8 is that right??
Answered by Reiny
The rule of 72 is a very rough approximation of the relation between interest rate and time for any amount of investment to double.
e.g. For Jordan's money to double in 8 years
rate x 8 = 72
rate = 72/8 = appr 9%

I do not see the operation of 72/8 in your choices.

actual answer:
100(1+i)^8 = 200
(1+i) = 2
take the 8th root of both sides
1+i = 2^(1/8) = 1.0905..
i = .0905 or 9.05% , not bad

I have absolutely no idea where you got the 8+72x8 from.
Where you just guessing?
Answered by david
no those were the choices my maths teacher gave us
Answered by Reiny
Either you or your teacher are in error.
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