Question

If you want to double your money in five years, what is the approximate annual rate of return you must earn using the Rule of 72?

O 12.0 percent
O 14.4 percent
O 3.6 percent
O 6.9 percent

Answer 1

Using the Rule of 72, to double your money in five years, you would need to earn an approximate annual rate of return of 14.4 percent.

Step-by-step explanation:

If you want to double your money in five years, you must find the approximate annual rate of return using the Rule of 72. To use the Rule of 72, divide the number 72 by the desired number of years to determine the needed interest rate. So for doubling money in five years, you would calculate 72 ÷ 5 = 14.4.

This means you would need an approximate annual rate of return of 14.4 percent to double your money within five years. Therefore, the correct answer to the question is 14.4 percent.