Question

According to the rule of 72, in about how many years will $80 be worth $40 if the rate of inflation is 3%?

A) 24 years
B) 6 years
C) 48 years
D) 12 years

Answer 1

According to the rule of 72, it will take approximately 24 years for $80 to be worth $40 if the rate of inflation is 3%.

Step-by-step explanation:

The Rule of 72 is a useful formula used to estimate the number of years it takes for an amount to double at a given interest rate or inflation rate. an example of how starting to save money early and benefiting from compound interest can be beneficial. The formula is 72 divided by the interest rate or inflation rate. In this case, the rate of inflation is 3%, so we can use the formula 72/3 = 24. Therefore, it will take approximately 24 years for $80 to be worth $40.