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There is a rule of thumb which can be used as an approximation called the Rule of 72 to find interest or period of time, given the other quantity.

a. If $1 is invested for 10 years, what compound rate is necessary for the money to double?

b. How long does it take for the money to double at 12%? 2. Continuous compounding of interest is found as i=er-1 Where r-nominal rate per year, decimal a. Suppose $1000 is invested into a continuously compounded 8% nominal interest account for 5 years. What is the future amount? b. What if this same problem was an 8%/yr CM problem? What is the future amount?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92395909

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