Use the approximate doubling time formula rule of 70 in the

Use the approximate doubling time formula (rule of 70) in the question. Prices are rising at a rate of 0.5% per month. What is its doubling time? By what factor will the prices increase in 8 years?

Solution

A =P (1+ 0.05/(100*12)) ^12t   where A= future value =2P, P =initial value, t =time

2P = P (1.000042)^12t

=> 2 = (1.000042)^12t

=> ln2 = 12t ln(1.000042)

=> 12t = ln2/ ln(1.000042)

=> t = 1375.32 = doubling time