Answer:
Compounding interest rate, r = 10.41%
Explanation:
As the investment will be doubled after 7 years from now, the future value of the current investment will be = $10,000 × 2 = $20,000
Therefore,
Number of periods (years), n = 7
Future value, FV = $20,000
Principal = Present Value, PV = $10,000
we have to determine the compounding interest rate, r.
We know,
r =
Putting the values into the formula, we can get,
r =
or, r =
With the help of calculator, we can find the value of = 1.1041
or, r = (1.1041 - 1)
or, r = 0.1041
Therefore, interest rate = 10.41%