Dividing the number seventy-two by an interest rate yields
A)the annual payment required to pay off a loan at that interest rate.
B)the number of years it would take an investment to double in value.
C)a good measure of the level of risk in the investment proposal.
D)all of these options are correct.

Question

Quizplus · Accepted Answer

Dividing the number seventy-two by an interest rate gives you the number of years it would take an investment to double in value. This is known as the rule of 72. Option A refers to calculating the present value of a loan, and option C refers to an unrelated concept.

Dividing the Number Seventy-Two by an Interest Rate Yields