Which of the following statements is true of the rule of 72?
A) It can be used to determine the amount of time it takes to double an investment.
B) It is fairly accurate for interest rates between 25 and 50 percent.
C) It states that the time to double your money (TDM) approximately equals 72/i, where i represents the years it takes to double your investment.
D) It can be used to estimate approximate compound interest earned for a period of 72 days.

Question

Quizplus · Accepted Answer

The rule of 72 is a simple formula used 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, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.

Which of the Following Statements Is True of the Rule