Lars deposited $50 into a savings account. According to the rule of 72, what interest rate will cause his money to double in approximately 29 years?

The rate that will double Lars deposit of $50 in 29 years will be calculated as follows:

Suppose the account used was using compound interest. Thus to determine his future value we shall use the formula:

FV=P (1+r) ^n

where:

FV is future value

p=principle

r=rate

n=periods

from the information given

FV=$100

p=$50

n=29 years

we are required to find r

thus

100=50 (1+r) ^29

100/50 = (1+r) ^29

2 = (1+r) ^29

2^ (1/29) = 1+r

1.02419=1+r

hence:

r=0.02419~2.419%