You deposit $20,000 in an account that doubles in 7 years. How many years will it take the account to double again if it earns 14% per year?
A) 4.92 years
B) 5.29 years
C) 6.62 years
D) 8.22 years

Question

Quizplus · Accepted Answer

According to the rule of 72, if an investment doubles in 7 years, the annual interest rate can be calculated by dividing 72 by 7, which gives approximately 10.29%. Now, if the account earns 14% per year, we can calculate the doubling time by dividing 72 by 14, which gives approximately 5.14 years. Therefore, the best choice is B, which is closest to this value.

You Deposit $20,000 in an Account That Doubles in 7