Phil has $2,000, and he needs it to grow to $4,000 in 8 years. Assuming he does not add any more money to this fund, what rate of interest would he need to earn? (Round the rate of interest to the nearest whole number.)
A) 6%
B) 7%
C) 8%
D) 9%
E) 10%

Question

Quizplus · Accepted Answer

Phil needs his money to double in 8 years. Using the rule of 72, which is a simplified formula to estimate the number of years required to double the investment at a given annual rate of return, we divide 72 by the number of years to find the approximate interest rate. 72 divided by 8 years equals 9, suggesting a 9% interest rate is needed to double the investment in 8 years.

Phil Has $2,000, and He Needs It to Grow to $4,000