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28 February, 08:09

Time to accumulate a given sum personal finance problem manuel rios wishes to determine how long it will take an initial deposit of $12 comma 00012,000 to double.

a. if manuel earns 1313 % annual interest on the deposit, how long will it take for him to double his money?

b. how long will it take if he earns only 1010 % annual interest?

c. how long will it take if he can earn 1515 % annual interest?

d. reviewing your findings in parts a , b , and c , indicate what relationship exists between the interest rate and the amount of time it will take manuel to double his money.

a. if manuel earns 1313 % annual interest, the amount of time to double his money is nothing years. (round to two decimal places.)

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Answers (1)
  1. 28 February, 11:13
    0
    To calculate how long it takes an investment to double, use the "Rule of 72." Simply divide 72 by the interest rate to find the number of years.

    a) 72/13 = 5.54 years

    b) 72/10 = 7.2 years

    c) 72/15 = 4.8 years

    d) The above answers show that the higher the interest rate, the shorter time it will take to double the money.
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