4. You have been offered an investment that promises to double your money every ten years. Considering the rule of 72. Required: a. What is your approximate rate of return on the investment? b. If the interest rate is 10%, how long does it take to double your investment?
Added by David M.
Close
Step 1
The rule of 72 states that you can approximate the number of years it takes for an investment to double by dividing 72 by the annual rate of return. In this case, the investment doubles every ten years, so the approximate rate of return would be 72 divided by 10, Show more…
Show all steps
Your feedback will help us improve your experience
Prabhakar Kumar and 53 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
Adi S.
How long to double an invesment of $10000 at the rate of 10% per annum if the invesment pays compound interest?
Haricharan G.
(a) How long will it take an investment to double in value if the interest rate is 8% compounded continuously? (Round your answer to two decimal places.) yr (b) What is the equivalent annual interest rate? (Round your answer to two decimal places.)
Sikandar B.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD