Question

An investment doubles over a period of six years. Determine the simple interest rate

Answer 1

Simple interest

$$A=P(1+rt)$$

Given $A=2P, t=6$

$$2P=P(1+r(6))$$

$$6r=1$$

$$r=\dfrac{1}{6}$$

$$r=\dfrac{100}{6}\%\approx16.6667\%$$

Annual interest rate is $r=\dfrac{100}{6}\%\approx16.6667\%.$