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Part II: Use logarithms to measure information in the following problems.
The “Rul...
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Mathematics, 30.03.2021 03:50 1hannacarson
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Part II: Use logarithms to measure information in the following problems.
The “Rule of 70” gives the approximate time T that it takes for an amount of money invested at an annual interest rate of r% to double in value:
T=70/r .
1. Write the compound interest formula for a principal P, an annual interest rate r, and a time T, with 2P as the final value of the investment.
2. Solve the equation you wrote in #1 for T by taking “ln” of both sides.
Use the approximation: ln(1+r)≈r, valid for small values of r.
3. Explain why the “Rule of 70” works.
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