Question

According to the rule of 72, if Randall invests $700 and $1900 into two separate accounts with the same interest rate, which amount will double faster? A. Both will double at the same rate. B. $1900 C. $700 D. None of the above

Answer 1

Both will double at the same rate.

Explanation:

Answer 2

The answer is A.) Both will double at the same rate.  Now I am going to explain how I know.  If the interest rate of each is 1% this means that 1% of each will be added to the accounts per month.  $1900 x 1% is $19 per month.  $700 x 1% is $7 per month.  Now I will divide 1900 by 19 to find how many months it will take to double the money in that account.  It will take 100 months for the account with $1900 in it to double.  Now I will multiply $700 by $7 to get 100 months also.  This means that each account will take 100 months to double so your answer is A.) Both will double at the same rate.