California Investors recently advertised the following claim: Invest your money with us at 21%, compounded annually, and we guarantee to double your money sooner than you imagine. Ignoring taxes, how long would it take to double your money at a nominal rate of 21%, compounded annually?
A) 330 years
B) 3.6 years
C) 9.5 years
D) 4.8 years

Question

Quizplus · Accepted Answer

To double your money at a 21% annual interest rate, you can use the Rule of 72, which is a simple way to estimate the number of years required to double the investment. Divide 72 by the interest rate: 72 / 21 = approximately 3.4 years. Since option B is the closest to this calculation, it is the correct answer.

California Investors Recently Advertised the Following Claim: Invest Your Money