If Fred's annual real income rises by 8 percent each year,his annual real income will double in about:

Question

Quizplus · Accepted Answer

Using the Rule of 72, which is a simple way to estimate the number of years required to double the real income at a constant annual growth rate, you divide 72 by the annual growth rate. In this case, 72 divided by 8 equals 9, so it will take approximately 8-9 years for Fred's real income to double.

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