Question
What rate of simple interest is needed for $700 to double, in 3 years?
Asked by: USER7739
70 Viewed
70 Answers
Answer (70)
Let the rate required to double the amount be r. To solve the question we use the formula:
A=p(1+r)^n
A=future amount
p=principle
r=rate
n=time
from the information given:
A=1400, p=$700, n=3 years,
plugging the values in the equation we get:
1400=700(1+r)^3
simplifying and solving for r we get:
2=(1+r)^3
squaring both sides:
√2=1+r
hence
r=√2-1
r=1.414-1
r=0.414
=41.4%
A=p(1+r)^n
A=future amount
p=principle
r=rate
n=time
from the information given:
A=1400, p=$700, n=3 years,
plugging the values in the equation we get:
1400=700(1+r)^3
simplifying and solving for r we get:
2=(1+r)^3
squaring both sides:
√2=1+r
hence
r=√2-1
r=1.414-1
r=0.414
=41.4%