Using the rule of 72,determine how long it would take for real GDP to double if it grew at a constant growth rate of 4 percent.
A)4 years.
B)18 years.
C)72 years.
D)144 years.

Question

Quizplus · Accepted Answer

The rule of 72 is a simple formula to estimate the number of years required to double the value of an investment at a fixed annual rate of interest. By dividing 72 by the annual rate of growth (4 percent in this case), we get 72 / 4 = 18 years.

Using the Rule of 72,determine How Long It Would Take