I would like my investment to double in value every 3 years. At what rate of interest would I need to invest it, assuming the interest is compounded continuously?

Question

I would like my investment to double in value every 3 years. At what rate of interest would I need to invest it, assuming the interest is compounded continuously?

Answer 1

google "rule of 72"

Answer 2

or, use the compound interest formula

A(t) = Pe^rt
we want the amount to double in three years.

2P = Pe^3r
2 = e^3r
ln 2 = 3r
r = ln2/3 = 0.231

so, the rate is 23.1%

The rule of 72 would give 24%, which is pretty close.

Answer 3

To find the interest rate needed to double your investment value every 3 years with continuous compounding, you can use the concept of the "Rule of 72." The Rule of 72 is a rough estimation that allows you to determine the time it takes for an investment to double based on the interest rate.

The formula for the Rule of 72 is:

Time (in years) = 72 / Interest Rate

In this case, you want your investment to double every 3 years. So, by plugging this value into the formula, you get:

3 = 72 / Interest Rate

To find the interest rate, you can rearrange the equation and solve for it:

Interest Rate = 72 / 3

Interest Rate ≈ 24%

Therefore, you would need to invest your money at an approximate interest rate of 24% (compounded continuously) in order for it to double in value every 3 years.