Question

Sherman entered the following values into the TVM Solver on his graphing

calculator
N=
I%=3.7
PV=-49
PMT=0
FV=98
P/Y=1
C/Y=1E11
PMT:ENU BEGIN
What does the rule of 69 predict will be the approximate value of N?
A. 13.2
B. 18.6
C. 19.5
D. 26.5

Answer 1

B. 18.6

Explanation:

The 'rule of 69' says the value will be doubled in 69/i years, where i is the annual interest rate in percent (compounded continuously). The interest rate is given as 3.7%, so the prediction is

n = 69/3.7 = 10.649

n ≈ 10.6