Have you always wanted to be able to do compound interest problems in your head? Perhaps not... but it's a very useful skill to have because it gives you a lightning fast benchmark to determine how good (or not so good) a potential investment is likely to be. Show
The rule says that to find the number of years required to double your money at a given interest rate, you just divide the interest rate into 72. For example, if you want to know how long it will take to double your money at eight percent interest, divide 8 into 72 and get 9 years.
Compound Interest CurveSuppose you invest $100 at a compound interest rate of 10%. The rule of 72 tells you that your money will double every seven years, approximately:
If you graph these points, you start to see the familiar compound interest curve:
 Practice using the Rule of 72It's good to practice with the rule of 72 to get an intuitive feeling for the way compound interest works. So... Why Stop at a Double?There's nothing sacred about doubling your money. You can also get a simple estimate for other growth factors, as this calculator shows: Why Does the Rule of 72 Work?If you want to know more, see this explanation of why the rule of 72 works. (Brace yourself, because it's slightly geeked out.) Engineering Economics Nội dung chính Show
Answer: Option C. Explanation: No answer description available for this question. Leave a ReplyYour email address will not be published. Comment Name Website Save my name, email, and website in this browser for the next time I comment. Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below. Recommended textbooks for you ENGR.ECONOMIC ANALYSIS ISBN:9780190931919 Author:NEWNAN Publisher:Oxford University Press Principles of Economics (12th Edition) ISBN:9780134078779 Author:Karl E. Case, Ray C. Fair, Sharon E. Oster Publisher:PEARSON Engineering Economy (17th Edition) ISBN:9780134870069 Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling Publisher:PEARSON Principles of Economics (MindTap Course List) ISBN:9781305585126 Author:N. Gregory Mankiw Publisher:Cengage Learning Managerial Economics: A Problem Solving Approach ISBN:9781337106665 Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor Publisher:Cengage Learning Managerial Economics & Business Strategy (Mcgraw-... ISBN:9781259290619 Author:Michael Baye, Jeff Prince Publisher:McGraw-Hill Education ENGR.ECONOMIC ANALYSIS ISBN:9780190931919 Author:NEWNAN Publisher:Oxford University Press Principles of Economics (12th Edition) ISBN:9780134078779 Author:Karl E. Case, Ray C. Fair, Sharon E. Oster Publisher:PEARSON Engineering Economy (17th Edition) ISBN:9780134870069 Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling Publisher:PEARSON Principles of Economics (MindTap Course List) ISBN:9781305585126 Author:N. Gregory Mankiw Publisher:Cengage Learning Managerial Economics: A Problem Solving Approach ISBN:9781337106665 Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor Publisher:Cengage Learning Managerial Economics & Business Strategy (Mcgraw-... ISBN:9781259290619 Author:Michael Baye, Jeff Prince Publisher:McGraw-Hill Education How long will it take money to double itself at 5% compounded annually?The expression for the compound interest amount. Substitute the known values. Thus, it will take 14.20 year. How long will it take money to double itself if invested at 5% compounded quarterly?Answer and Explanation: Substitute the known values. Thus, it will take 14.20 year. How long will it take money to double itself if invested at 10% compounded annually?A 10% interest rate will double your investment in about 7 years (72 ∕ 10 = 7.2); an amount invested at a 12% interest rate will double in about 6 years (72 ∕ 12 = 6). Using the Rule of 72, you can easily determine how long it will take to double your money. How long will it take money to triple itself if invested at 5% simple interest?1 Expert Answer It will take 22.52 years to triple the investment at interest rate of 5%. How long it take money to double itself if invested 5% compounded annually?r = 5 % . and we are asked to find the time that it would take for money to double if it is invested at this rate if it is compounded annually, that is A=2P A = 2 P . Since this is compound interest, we will be using the formula below. Thus, it will take 14.21 years for the money to double.
In what time will a sum of money double itself at 5% compound interest?Answer: It takes 14.2 years for the amount to double itself.
How long will it take to double your money with a 5% return?In a less-risky investment such as bonds, which have averaged a return of about 5% to 6% over the same time period, you could expect to double your money in about 12 years (72 divided by 6). Keep in mind that we're talking about annualized returns or long-term averages.
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How long does it take money to double itself if invested at 5% compounded annually?
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