The rule of seven is based on the use of continuous interest to approximate the doubling time
Question:
The rule of seven is based on the use of continuous interest to approximate the doubling time of money. The "7" comes from the fact that the natural log of 2 is approximately 0.7. The rule says that money invested at 10% doubles approximately every 7 years and that money invested at 7% doubles approximately every 10 years.
Develop the rule of seven
a) If interest is 4% compunded quarterly, then money will double after _____ years
b) If interest is 6% compunded daily, then money will double after____ years
c) If interest is 3% compunded quarterly, then money will double during after _____ years
d) If interest is 5% compunded daily, then money will double after _____ years
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill