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Miguel plans on retiring in 16 years, and he wants to double his money by that time. He's contacted various banks, looking for a CD that compounds interest monthly, and to calculate what annual interest rate he needs, he is using the rule of 72. (3 points: Part I – 1 point; Part II – 1 point; Part III – 1 point)

Part I: What is the rule of 72? To represent the annual interest rate, use r.








Part II: What equation can Miguel set up to solve for the annual interest rate he needs to double his money by the time he retires?








Part III: What annual interest rate does Miguel need to double his money by the time he retires?

Respuesta :

The rule of 72 is a rule of thumb that is used to determine the doubling time for an investment given the annual interest rate.

The equation Miguel needs to set up is r = 72/16.

The interest rate is 4.5%.

What is the rule of 72?

The rule of 72 is used to determine the time it would take an investment to double in value. The doubling time is determined by dividing 72 by the interest rate.

Number of years it would take an investment to double = 72 / interest rate

n = 72 / r

r = 72 / n

72 / 16 = 4.5%

To learn more about doubling time, please check: https://brainly.com/question/27314121

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