When calculating the number of years needed to grow an investment to a specific amount of money
A) the lower the interest rate, the shorter the time period needed to achieve the growth.
B) the higher the interest rate, the shorter the time period needed to achieve the growth.
C) the interest rate has nothing to do with the length of the time period needed to achieve the growth.
D) the Rule of 72 is the only way to calculate the time period needed to achieve the growth.

Question

Quizplus · Accepted Answer

The higher the interest rate, the shorter the time period needed to achieve the growth. This is because higher interest rates lead to faster compounding of the investment, thus reaching the desired amount in less time.

When Calculating the Number of Years Needed to Grow an Investment