Asked by Trinity Whisenhunt on Sep 23, 2024
Verified
Lucy invested $10,000 at the rate of 12%.According to the rule of 72,it would take ______ years for her money to double
A) 4
B) 5
C) 6
D) 7
Rule of 72
A mathematical rule to estimate the number of years required to double an investment at a given annual fixed interest rate.
$10,000
A numerical figure representing a specific amount of money, notable in various financial contexts.
- Use the rule of 72 to estimate the doubling time for an investment.
Verified Answer
JP
Jayme Perks6 days ago
Final Answer :
C
Explanation :
The rule of 72 is a quick calculation that estimates the number of years it will take for an investment to double in value, given a fixed annual rate of interest.
To use the rule of 72, you divide the annual rate of return into 72. In this case, 72/12 = 6. So, it would take Lucy 6 years for her investment to double. The closest option to 6 years is Choice letter (C), so it is the best choice.
To use the rule of 72, you divide the annual rate of return into 72. In this case, 72/12 = 6. So, it would take Lucy 6 years for her investment to double. The closest option to 6 years is Choice letter (C), so it is the best choice.
Learning Objectives
- Use the rule of 72 to estimate the doubling time for an investment.