Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A useful rule of thumb to determine the time it takes your investment to double is to simply divide 72 by the expected return. For

image text in transcribed

A useful rule of thumb to determine the time it takes your investment to double is to simply divide 72 by the expected return. For instance, if the annual expected return is 6%, the rule says that it will take 72/6=12 years for your investment to double. This is very close (but not exactly equal) to the actual time of 11.90 years it will take your initial investment to double. For which expected return value, the rule will hold exactly? That is, for which expected return the approximation given by the rule will be exactly equal to the time it will take your investment to double? Please express your answer as a percentage and use 3 decimals in your

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Intelligence For IT Professionals

Authors: Julie Bonner

1st Edition

103215294X, 9781032152943

More Books

Students also viewed these Finance questions