Question

To the closest year, how long will it take a $200 investment to double if it earns 7 percent interest? How long will it take if the investment ears 18 percent? (Note: use the Rule of 72).

Answer 1

1)

If interest is 7%:

Number of years using rule of 72 = 72 / rate

Number of years using rule of 72 = 72 / 7

Number of years using rule of 72 = 10.29 years

1)

If interest is 18%:

Number of years using rule of 72 = 72 / rate

Number of years using rule of 72 = 72 / 18

Number of years using rule of 72 = 4 years