Asked by Colton Larson on May 27, 2024
Verified
Sari puts $100 into an account with an interest rate of 10 percent. According to the rule of 70, about how much does she have at the end of 21 years?
A) $210
B) $300
C) $800
D) $1,010
Rule Of 70
A rule estimating the number of years required to double an investment or population at a particular annual growth rate, calculated by dividing 70 by that growth rate.
Interest Rate
The financial charge for borrowing resources, represented as a percentage of the initial loan amount.
Account
A record that keeps track of financial transactions, investments, or the financial state of an individual, institution, or company.
- Comprehend and utilize the rule of 70 to calculate the duration required for an investment to double in value.
Verified Answer
NS
Naresh SharmaJun 01, 2024
Final Answer :
C
Explanation :
The rule of 70 is a way to estimate the number of years it takes for an investment to double in value at a given annual rate of return by dividing 70 by the interest rate. With a 10 percent interest rate, it takes about 7 years for the investment to double (70/10 = 7). In 21 years, the investment doubles 3 times (21/7 = 3). Starting with $100, after the first 7 years it doubles to $200, after 14 years it doubles again to $400, and after 21 years it doubles once more to $800.
Learning Objectives
- Comprehend and utilize the rule of 70 to calculate the duration required for an investment to double in value.