Question

For annually compounded interest, what rate would result in a single investment doubling in 3 years?

Answer 1

Answer: Approximately 25.992%

Work Shown:

`A = P*(1+r/n)^(n*t)\\\\2P = P*(1+r/1)^(1*3)\\\\2 = (1+r)^(3)\\\\(1+r)^(3) = 2\\\\1+r = \sqrt[3]{2}\\\\r = -1+\sqrt[3]{2}\\\\r \approx 0.25992\\\\`

That converts to 25.992% after moving the decimal point two spots to the right. Round this value however your teacher instructs.