RULE OF 70 Investors are often interested in knowing how long it takes for a particular in...

RULE OF 70 Investors are often interested in knowing how long it takes for a particular investment to double. A simple means for making this determination is the “rule of 70,” which says: The doubling time of an investment with an annual interest rate r (expressed as a decimal) compounded continuously is given by

a. For interest rate r , use the formula B =Pert to find the doubling time for r =4, 6, 9, 10, and 12. In each case, compare the value with the value obtained from the rule of 70.

b. Some people prefer a “rule of 72” and others use a “rule of 69.” Test these alternative rules as in part (a) and write a paragraph on which rule you would prefer to use.