what rate of interest compounded annually is required to double an investment in 3 years?
+130511 We have
2A =A(1 + r)^3 divide both sides by A
2 = (1 + r)^3 take the log of both sides
log 2 = log(1+ r)^3 and we can write
log 2 =3log(1 + r) divide both sides by 3
(log2) /3 = log ( 1 + r) in exponential form, we have
10 ^[log2 ]/3 = 1 + r subtract 1 from both sides
10 ^[log2 ]/3 - 1 = r = about 25.9 %
+130511 We have
2A =A(1 + r)^3 divide both sides by A
2 = (1 + r)^3 take the log of both sides
log 2 = log(1+ r)^3 and we can write
log 2 =3log(1 + r) divide both sides by 3
(log2) /3 = log ( 1 + r) in exponential form, we have
10 ^[log2 ]/3 = 1 + r subtract 1 from both sides
10 ^[log2 ]/3 - 1 = r = about 25.9 %
