Question 507453: Suppose you are planning to invest a sum of money. Estimate the rate that you need so that your investment doubles in 10 years.
The Rate = ____%
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! Suppose you are planning to invest a sum of money. Estimate the rate that you need so that your investment doubles in 10 years.
The Rate = ____%
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A=P(1+r)^n, P=initial investment, r=interest rate per period, A=amount after n-years
Since you want the investment to double, A/P=2, so the formula becomes:
2=(1+r)^10
raise both sides to 1/10 power
1.0718=1+r
r=1.0718-1=.0718
Ans:
The rate that you need so that your investment doubles in 10 years=7.18%
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