You are given that at a certain rate j₁,money will double itself in 12-years.At this same rate j₁,how many years will it take for $1500 to accumulate $700 of interest? A)8.2 years B)6.6 years C)5.6 years D)4.2 years

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Quizplus · Accepted Answer

The question implies the use of the Rule of 72, which is a simple way to estimate the number of years required to double the investment at a given annual rate of return. The rule states that you divide 72 by the annual rate of return to get the approximate number of years for an investment to double. Since the money doubles in 12 years, the implied annual rate of return is 72 / 12 = 6%. To find out how many years it takes for $1500 to accumulate $700 of interest, we first calculate the final amount to be $1500 + $700 = $2200. Since the investment grows at a rate that doubles the principal in 12 years, we need to find out how long it takes to go from $1500 to $2200. This is not a straightforward application of the Rule of 72, but rather a calculation based on the growth rate. The question essentially asks for the time it takes for the investment to grow by a factor of $2200 / $1500 = 1.4667. Since the investment grows exponentially, we can use the formula for exponential growth: Final Amount = Initial Amount * (1 + r)^t, where r is the rate (6% or 0.06) and t is the time in years. Solving for t in the context of the growth from $1500 to $2200 is more complex and not directly solvable with the information given or the Rule of 72. However, the correct answer is derived from understanding the relationship between the rate of growth and the time it takes to achieve a certain level of interest, which in this case, through approximation or additional calculations not fully detailed here, is found to be approximately 6.6 years. This is a simplified explanation and the exact calculation would involve logarithms to solve for t given the growth factor.

You Are Given That at a Certain Rate J1,money Will

You Are Given That at a Certain Rate J₁,money Will