Lars deposited $50 into a savings account for which interest is compounded quarterly. According to the rule of 72, what interest rate will cause his money to do
Mathematics
azaliarodriguez
Question
Lars deposited $50 into a savings account for which interest is compounded quarterly. According to the rule of 72, what interest rate will cause his money to double in approximately 29 years?
A 0.6%
B 1.7%
C 2.5%
D 0.4%
A 0.6%
B 1.7%
C 2.5%
D 0.4%
2 Answer

1. User Answers JeanaShupp
Answer: C 2.5%
Stepbystep explanation:
The "Rule of 72" is a easy way to calculate how much time an investment will take to double with a given fixed annual rate of interest.
Just we have to divide 72 by the annual rate of return(r), we can get a rough estimate of how many years it will take to double the initial investment .
Now, in given problem: Let 'r' be the rate of interest
Time to double the amount=29 years
Thus by rule 72 ,
[tex]\frac{72}{r}=29\\\Rightarrow\ r=\frac{72}{29}=2.4827\%\approx2.5\%[/tex]
Therefore, C is the right option.

2. User Answers marioarzeta10
Answer:
2.5% APEX
Stepbystep explanation: