Question

Using the Rule of 72, answer the following question. Please show your work.Doug invested $2,500 into a Certificate of Deposit earning 6.5% interest. How long will it take to double Doug’s investment?

Answer 1

It would take 11.08 years to double up the initial investment.

Explanation:

Remember that the formula we use for the rule of 72 is:

`t=(72)/(r)`

Where:

• t, is the number of periods it will take the investment to double up

,

• r, is the rate of return of the investment, expressed as a percentage

Using the rate given, we'll have that:

`\begin{gathered} t=(72)/(6.5) \\ \\ \Rightarrow t=11.08 \end{gathered}`

Therefore, we can conlcude that it would take 11.08 years to double up the initial investment.