39.8k views
4 votes
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?

User BhavikKama
by
8.3k points

1 Answer

4 votes

Answer:

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.

User Ilya Boyandin
by
8.3k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories