If you wanted to double $1,000 in 10 years' time, what average rate of return would...

Question

Question

If you wanted to double $1,000 in 10 years' time, what average rate of return would you require on your investment?

Answer 1

Answer #1

Given data

Amount invested = $1,000

Given time to double the investment = 10 years

To find

the rate needed to double an investment within 10 years of time period

As per Rule of 72

Rate required to double = 72/t

t = length of the time

Hence 72/10 = 7.2%

Therefore, rate to double an investment within 10 years of time period = 7.2%.

Answer 2

Similar Homework Help Questions

What annual interest rate would you need to earn if you wanted a $1,000 per month...

What annual interest rate would you need to earn if you wanted a $1,000 per month contribution to grow to $84,500 in six years?
If your investment doubles in 6 3/4 years, what approximate annual rate of return would you...

If your investment doubles in 6 3/4 years, what approximate annual rate of return would you have earned? If you could earn an annual rate of 7.50%, approximately how long would it take for your investment to double? A)9.60%; 10.67 years B)13.50%; 9.20 years C)10.67%; 9.60 years D.)9.20%; 13.50 years
If your investment doubles in 6 3/4 years, what approximate annual rate of return would you...

If your investment doubles in 6 3/4 years, what approximate annual rate of return would you have earned? If you could earn an annual rate of 7.50%, approximately how long would it take for your investment to double? A. 9.60%; 10.67 years B. 13.50%; 9.20 years C. 9.20%; 13.50 years D. 10.67%; 9.60 years answer is NOT 10.81 and 9.58 !

An investment provides you with $1,000 after six years and $2,000 after nine years. What is...

An investment provides you with $1,000 after six years and $2,000 after nine years. What is the present value of these cash flows if you require a 4% rate of return (discount the cash flows at that rate)?
What annual rate of return will you earn from a $1,000 zero coupon bond that matures...

What annual rate of return will you earn from a $1,000 zero coupon bond that matures in ten years if you pay $376 for it today? On the other hand, what is the most you would pay today for the same bond if you needed to earn an annual 7.5% from your investment?
Question 8 10 pts What would the value of an investment be if you were promised a 6% return with $1,000 monthly pay...

Question 8 10 pts What would the value of an investment be if you were promised a 6% return with $1,000 monthly payments for 15 years and a lump sum paid at the end of $400,000? O $166,713 O $150,035 〇$281,496 O $340,748 o $247,680 Question 8 10 pts What would the value of an investment be if you were promised a 6% return with $1,000 monthly payments for 15 years and a lump sum paid at the end of...

If you wanted to reverse a chemical reaction, it would require double the energy of the...

If you wanted to reverse a chemical reaction, it would require double the energy of the original reaction. True False
1.a. How much would you pay for a 10-year bond with a face value of $1,000...

1.a. How much would you pay for a 10-year bond with a face value of $1,000 and a coupon rate of 8% if you wanted a 5% yield to maturity? b. Find the rate of return for this bond if you plan to sell it after four years for $1,259.34.
1. Why would the average rate of return differ from the internal rate of return on the same project? 2. What would yo...

1. Why would the average rate of return differ from the internal rate of return on the same project? 2. What would you use to evaluate an investment opportunity?

nti You have an investment account that started with $1,000 10 years ago and which now...

nti You have an investment account that started with $1,000 10 years ago and which now has grown to $12,000. a. What annual rate of return have you earned (you have made no additional contributions to the account)? b. If the investment account earns 16% per year from now on, what will the account's value be 10 years from now? wo a. What annual rate of return have you earned (you have made no additional contributions to the account)? aizl...