Question

On January 1, 1980, Moises deposited $1850 into a savings account paying 5.6% interest, compounded quarterly. If he hasn't made any additional deposits or withdrawls since then, and if the interest rate stayed the same, in what year did his balance hit $3700, according to the rule of 72?

Answer 1

The rule of 72 says that if you divide 72 by the interest rate the result is the number of years it takes to double your money.

72/5.6 = 12.86 years. to double your money from $1850 to $3700 it would take 12.86 years, which means you will have $3700 near the end of 1992.