Question

In: Finance

you have an opportunity to invest in a business that will double your money in 8...

you have an opportunity to invest in a business that will double your money in 8 years. what is the annual rate of return of this investment opportunity

Solutions

Expert Solution

As the money doubles in 8 years,

Using Rule of 72,

Rate of interest = 72/ Number of years = 72/8 = 9% pa

So, using the rule of 72, the investment yields 9% pa


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