Paul invested $10,000 in a security that will double in value in ten years.Approximately what annual rate of return is this investment making?
A)10.0 percent
B)7.2 percent
C)6.3 percent
D)5.8 percent

Question

Quizplus · Accepted Answer

The investment doubles in 10 years, which corresponds to the Rule of 72. The Rule of 72 is a simple way to estimate the number of years required to double the investment at a given annual rate of return by dividing 72 by the annual rate of return. In this case, dividing 72 by 10 years gives an approximate annual rate of return of 7.2 percent.

Paul Invested $10,000 in a Security That Will Double in Value