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31 May, 09:38

Investment: Rule of 70

Use the Rule of 70 from Exercise 37 to approximate the times necessary for an investment to double in value when

(a) r = 10%

(b) r = 7%

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  1. 31 May, 10:14
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    a) 7 years for the investment to double in value.

    b) 10 years for the investment to double in value.

    Step-by-step explanation:

    The rule of 70% states that, for an investment to double in value, the required time is 70/r, in which r is the annual interest rate, as a percent.

    So

    (a) r = 10%

    It is going to take 70/10 = 7 years for the investment to double in value.

    (b) r = 7%

    It is going to take 70/7 = 10 years for the investment to double in value.
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