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Math Help - another effective annual interest rate question

  1. #1
    Junior Member
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    Smile another effective annual interest rate question

    The question is about the rule of 72, to determine the accuracy of this rule, I need to follow these steps:
    Suppose the effective annual interest rate is x, and the corresponding doubling time is Y1(x). Show that (1+x)^Y1 = 2 and that Y1 (x) = log2/log(1+x)
    This is the last question on effective annual interest rates I have, can someone give me a hint?
    Thankx
    Keith
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  2. #2
    Grand Panjandrum
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    Quote Originally Posted by kcsteven View Post
    The question is about the rule of 72, to determine the accuracy of this rule, I need to follow these steps:
    Suppose the effective annual interest rate is x, and the corresponding doubling time is Y1(x). Show that (1+x)^Y1 = 2 and that Y1 (x) = log2/log(1+x)
    This is the last question on effective annual interest rates I have, can someone give me a hint?
    Thankx
    Keith
    You might find this thread of some use.

    RonL
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