If Fred's annual real income rises by 8 percent each year, his annual real income will double in about
A) 8 to 9 years.
B) 10 to 11 years.
C) 5 to 6 years.
D) 19 to 20 years.

Question

Quizplus · Accepted Answer

Using the Rule of 72, which is a simple way to estimate the number of years required to double the investment at a given annual rate of return, you divide 72 by the annual growth rate. For an 8% growth rate, 72/8 = 9 years.

If Fred's Annual Real Income Rises by 8 Percent Each