Question

Using the rule of 72 how soon will money double at the following interest rates (Answer all five) A) 8%----will double in years B) 12%----Will double in years C) 4%----will double in years D) 3%----will double in years E) 10%----will double in _years Using the rule of 72 what interest will I need to earn to get my money to double in (A) 6 years _interest required (B) 12 years interest required

Answer 1

Part 1)

Rule of 72

Doubling period = 72/Interest rate

A)

Interest rate = 8%

Doubling period = 72/8

= 9 years

B)

Interest rate = 12%

Doubling period = 72/12

= 6 years

C)

Interest rate = 4%

Doubling period = 72/4

= 18 years

D)

Interest rate = 3%

Doubling period = 72/3

= 24 years

E)

Interest rate = 10%

Doubling period = 72/10

= 7.2 years

Part 2)

A)

Doubling period = 6 years

Interest required = 72/Doubling period

= 72/6

= 12%

B)

Doubling period = 12 years

Interest required = 72/Doubling period

= 72/12

= 6%

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