BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Rule of 72
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Rule of 69
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By referring to the CF Table
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All of the Above
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Detailed explanation-1: -Basically, you can find the doubling time (in years) by dividing 70 by the annual growth rate. Imagine that we have a population growing at a rate of 4% per year, which is a pretty high rate of growth. By the Rule of 70, we know that the doubling time (dt) is equal to 70 divided by the growth rate (r).
Detailed explanation-2: -For example, the population growth of bacteria was characterized by the function PT=0.022×1.032T. Such exponential growth or decay can be characterized by the time it takes for the population size to double or shrink in half.
Detailed explanation-3: -What is the Rule of 72? The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double.
Detailed explanation-4: -The number of years it takes for a country’s economy to double in size is equal to 70 divided by the growth rate, in percent. For example, if an economy grows at 1% per year, it will take 70 / 1 = 70 years for the size of that economy to double.