An investment doubles in 9 ½ years.What nominal rate of interest j₄ is being earned?

Question

Quizplus · Accepted Answer

To calculate the nominal rate of interest, we can use the rule of 72 which states that the time taken to double the investment is approximately equal to 72 divided by the nominal interest rate. In this case, the investment doubles in 9 1/2 years, or 19/2 years. 
Using the rule of 72, we get:
72 / nominal interest rate = time taken to double
72 / nominal interest rate = 19/2
nominal interest rate = 72 / (19/2) = 7.36%
Therefore, the answer is choice B, 7.36%.

An Investment Doubles in 9 ½ Years