Question

According to the rule of 72, approximately how long will it take $100 to double if you keep it in an account that earns 4% interest?

O 125 years
O 18 years
O 12,500 years
O 1800 years

Answer 1

The rule of 72 is an approximation to figure out doubling time. In this case, it will take approximately 18 years for $100 to double in an account that earns 4% interest.

Step-by-step explanation:

The rule of 72 is an approximation to figure out doubling time. We divide the rule number, 72, by the annual growth rate to obtain the approximate number of years it will take for income to double. In this case, since the interest rate is 4%, we divide 72 by 4 to get 18 years. Therefore, it will take approximately 18 years for $100 to double in an account that earns 4% interest.