An initial investment of $5000 doubles in value in 6.3 years. Assuming continuous compounding, what was the interest rate? Round to the nearest tenth of a percent.

1. Accuracy of the Rule of 72

The actual interest rate required to double an investment in 6 years is 21/6 - 1 = 12.2%, not 12%. But the Rule of 72 is reasonably accurate, especially for interest rates between 6% and 10%

2. Calculate Accrued Amount (Principal + Interest) A = Pert

Calculate Principal Amount, solve for P. P = A / ert

Calculate rate of interest in decimal, solve for r. r = ln (A/P) / t.

Calculate rate of interest in percent. R = r * 100.

Calculate time, solve for t. t = ln (A/P) / r.

3.16.5 Years

4. For example, if your money earns an 8 percent interest rate, it will triple in 14 years and 5 months (115 divided by 8 equals 14.4). If your money earns a 5 percent interest rate, it will triple in 23 years (115 divided by 5 equals 23).