If you earn an interest rate of R percent, continuously compounded, your money doubles after approximately 70/R
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If you earn an interest rate of R percent, continuously compounded, your money doubles after approximately 70/R years. For example, at R = 5%, your money doubles after 70/5 or 14 years. Use the concept of doubling time to justify the Banker’s Rule. Sometimes, the rule 72/R is used. It is less accurate but easier to apply because 72 is divisible by more numbers than 70.
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