Question

Sally's parents deposited $15,000 into a college savings account on her third birthday. The account had an interest rate of 9.6%

compounded annually. They were hoping that the money would double twice by the time she was 18 years old. Using the rule of
7.
-
72,1=
will their hopes come true?
VX
O
Yes, the $15,000 will double each 7.5 years. In 15 years, it will double twice.
Yes, the $15,000 will double in 7.5 years and be four times as much in 15 years.
No, the $15,000 will only double once in 15 years, not double twice.
No, it will take 30 years for the $15,000 to double twice.
O​

Answer 1

The rule of 72 says to divide 72 over the interest rate without the percent sign attached to it. This means we divide 72 over 9.6 to get 72/9.6 = 7.5

So the money doubles every 7.5 years. When another 7.5 years rolls around, a total of 2*7.5 = 15 years has gone by. At this point the money is roughly 4 times that of the original amount deposited.

Answer: choice B

Answer 2

Yes, the $15,000 will double each 7.5 years. In 15 years, it will double twice.

Explanation: