Sari puts $100 into an account with an interest rate of 10 percent. According to the rule of 70, about how much does she have at the end of 21 years?
A)$210
B)$300
C)$800
D)$1,010

Question

Quizplus · Accepted Answer

The rule of 70 is a way to estimate the number of years it takes for an investment to double in value at a given annual rate of return by dividing 70 by the interest rate. With a 10 percent interest rate, it takes about 7 years for the investment to double (70/10 = 7). In 21 years, the investment doubles 3 times (21/7 = 3). Starting with $100, after the first 7 years it doubles to $200, after 14 years it doubles again to $400, and after 21 years it doubles once more to $800.

Sari Puts $100 into an Account with an Interest Rate