Answer:
Interest rate of 7%.
Step-by-step explanation:
The compound interest formula is given by:
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the time in years for which the money is invested or borrowed.
In this question:
We want to find t for which [tex]A(t) = 2P[/tex] when [tex]n = 1, t = 10[/tex]. So
[tex]A(t) = P(1 + \frac{r}{n})^{nt}[/tex]
[tex]2P = P(1 + r)^{10}[/tex]
[tex](1 + r)^10 = 2[/tex]
[tex]\sqrt[10]{(1 + r)^10} = \sqrt[10]{2}[/tex]
[tex]1 + r = 1.07[/tex]
[tex]r = 0.07[/tex]
So a interest rate of 7%.