A sum is invested at 4% continuous interest. This means that its value grows exponentially with k equaling the decimal rate of interest. Find, to the nearest tenth of a year, the time required for the investment to double in value.

Question

Mathematics

Kenneth Boone

26 October, 10:47

A sum is invested at 4% continuous interest. This means that its value grows exponentially with k equaling the decimal rate of interest. Find, to the nearest tenth of a year, the time required for the investment to double in value.

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Answers (1)

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Holly Green · Answer 1

T = 72/4 = 18years

T = 20years (to the nearest tenth)

Step-by-step explanation:

Using the rule of 72, which is used to estimate the number of years for a given investment to double at a given interest rate.

Doubling time = 72/interest rate

T = 72/r

Rate r (in percentage) = 4%

Time T (in years)

T = 72/4 = 18years

T = 20years (to the nearest tenth)