ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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18 years
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16 years
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12 years
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8 years
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Detailed explanation-1: -For example, if the interest rate earned is 6%, it will take 12 years (72 divided by 6) for your money to double. If you want your money to double every 8 years, you will need to earn an interest rate of 9% (72 divided by 8).
Detailed explanation-2: -The formula is: Time = 72/r, where r is the rate of interest. The rule of 72 says that it will take about 12 years for an investment to double.
Detailed explanation-3: -By using the Rule of 72 formula, your calculation will look like this: 72/6 = 12. This tells you that, at a 6% annual rate of return, you can expect your investment to double in value-to be worth $100, 000-in roughly 12 years.
Detailed explanation-4: -For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
Detailed explanation-5: -Answer and Explanation: The answer is: 12 years.