At very low interest rates, the "Rule of 72" does not approximate the compounding process well.

Name: At very low interest rates, the "Rule of 72" does not approximate the compounding process well.
Brand: Quizplus
Rating: 4.8 (32 reviews)

Question

Quizplus · Accepted Answer

The Rule of 72 assumes that the interest rate is compounded annually, and it becomes less accurate the lower the interest rate. At very low rates, the compounding process becomes more complex and cannot be accurately approximated by the Rule of 72.

At Very Low Interest Rates, the "Rule of 72" Does