If an investment advisor promises to double your money in 6 years, he\'s promisi
ID: 2811171 • Letter: I
Question
If an investment advisor promises to double your money in 6 years, he's promising an annual return of approximately___%. If, however, you earn an actual annual return of 7.75%, it would take approximately ___ years to double your money.
As you track your gas mileage, you notice that over time your MPG has been going up. Which of the following changes in miles and gallons would be consistent with this increase?
A. miles increasing and gallons going up.
B. No change in miles and goolons going up.
C. both increasing but with the increase in miles being weaker
D. there is not enough information given to answer this question
Explanation / Answer
For doubling money:
FV=2*PV
n=6
Let rate be r:
(1+r)^6=2
Rate =12.25%
If return =7.75%
Then:
(1.0775^n)=2
n=9.29 years
If MPG goes up it means that the mileage is increasing or there are more miles per gallon.
Hence most apt answer is option D