ECONOMICS
MONEY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
18 years
|
|
|
5.5 years
|
|
|
13 years
|
|
|
26 years
|
|
|
9 years
|
Detailed explanation-1: -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. In this case, 18 years.
Detailed explanation-2: -Answer and Explanation: The answer is: 12 years.
Detailed explanation-3: -To use the rule, divide 72 by the investment return (the interest rate your money will earn). The answer will tell you the number of years it will take to double your money. For example: If your money is in a savings account earning 3% a year, it will take 24 years to double your money (72 / 3 = 24).
Detailed explanation-4: -Simply divide the number 72 by the annual rate of return to determine how many years it will take to double. For example, $100 with a fixed rate of return of 8% will take approximately nine (72 / 8) years to grow to $200.