Multiple choice

If the interest is compounded annually, at what percentage rate will a sum double itself in seven years?

  1. 7.0%

  2. 8.0%

  3. 10.41%

  4. 7.9%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Using compound interest formula A = P(1 + r/100)^n. 2P = P(1 + r/100)^7. 2 = (1 + r/100)^7. 1 + r/100 = 2^(1/7) approx 1.10409. r = 10.41%.

AI explanation

Using the compound interest formula A = P(1 + R/100)^n, we know the amount doubles, so 2 = (1 + R/100)^7. Taking the natural logarithm of both sides gives ln(2) = 7 * ln(1 + R/100). Solving this requires R = 100 * (10^(log(2)/7) - 1), which equals approximately 10.41 percent.

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