If you wanted to double your money in the same time as in the answer to the previous question, but were using monthly compounding, what would be the rate of interest you would require?
A) 6.0010%
B) 6.0068%
C) 6.0163%
D) 6.0224%

Question

Quizplus · Accepted Answer

Since the previous answer used annual compounding, we need to find the equivalent monthly compounding rate that would double the money in 12 years. Using the formula for the effective annual rate with monthly compounding:
(1 + r/12)^12 - 1 = 0.1
Solving for r, we get:
r = 12[(1.1)^(1/12) - 1] = 6.0163%
Therefore, choice C would be the rate of interest required to double your money in 12 years with monthly compounding.

If You Wanted to Double Your Money in the Same