Question

(1 point) If you make a deposit into a bank account, at what interest rate (compounded monthly) should you invest if you would like to double your investment in 64 months? % (Note: Your answer should be accurate to two decimal places)

Answer 1

A = P (1+ i/n)^nt

P = Principal invested.

A = total amount earned = 2P

i = Nominal Rate of Interest.

n = Number of compounding periods in a year = 12

t = Time = 64 months = 16/3 years

2P = P(1+i/12)^12*16/3

2 = (1+i/12)⁶⁴

2^1/64 = (1+i/12)

1.01089 = (1+i/12)

0.01089*12 = i

i = 0.13068 or 13.07%