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%

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.

marioarzeta10 marioarzeta10 · Answer 2 · 2019-06-03T17:18:29+02:00

marioarzeta10 marioarzeta10

03-06-2019

Answer:

2.5% --APEX

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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%

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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%