In your first year out of college you hope to earn $60,000 per year.How many years will you have to work until you earn $120,000 if your income increases at a rate of 10% per year? Use the Rule of 72 to determine your answer.
A)You would need to work for just over 5 years to reach an income level of $100,000 per year.
B)You would need to work for just over 6 years to reach an income level of $100,000 per year.
C)You would need to work for just over 7 years to reach an income level of $100,000 per year.
D)You would need to work for just over 8 years to reach an income level of $100,000 per year.

Question

Quizplus · Accepted Answer

The Rule of 72 estimates the number of years required to double an investment at a fixed annual rate of interest. By dividing 72 by the annual increase rate (10%), you get approximately 7.2 years to double the income from $60,000 to $120,000.

In Your First Year Out of College You Hope to Earn