Table 17.2 $\begin{array}{|c|c|}
\hline \text { Year } & \text { Real GDP } \
\hline 1 & \$ 400 \text { million } \
\hline 2 & \$ 425 \text { million } \
\hline
\end{array}$
Refer to Table 17.2.Using the rule of 72,this economy will double in
A)2.88 years.
B)450 years.
C)11.52 years.
D)6.25 years.

Question

Table 17.2 $\begin{array}{|c|c|}
\hline \text { Year } & \text { Real GDP } \
\hline 1 & \$ 400 \text { million } \
\hline 2 & \$ 425 \text { million } \
\hline
\end{array}$
 Refer to Table 17.2.Using the rule of 72,this economy will double in
A)2.88 years.
B)450 years.
C)11.52 years.
D)6.25 years.

Quizplus · Accepted Answer

The rule of 72 is a way to estimate the number of years required to double the investment at a given annual rate of return. It is calculated by dividing 72 by the annual growth rate. In this case, the growth rate from Year 1 to Year 2 is $\frac{425 - 400}{400} \times 100 = 6.25\%$. Using the rule of 72, $72 \div 6.25 = 11.52$ years.

Table 172 Refer to Table 17