John Madrid put $1,000 into a mutual fund yielding an 18% annual rate of return.Using the Rule of 72,calculate approximately how long it will take for the investment to double in value.
A)Three years,four months
B)Three years and seven months
C)Four years
D)Four years and four months
E)Five years

Question

Quizplus · Accepted Answer

The Rule of 72 is a simple way to estimate the number of years required to double the investment at a given annual rate of return. By dividing 72 by the annual rate of return (18% in this case), we get 72 / 18 = 4 years.

John Madrid Put $1,000 into a Mutual Fund Yielding an 18