Question

The rule of 72 can be used to give an estimate of the time period in which an inves t ment amount can grow by ______ , given the annual rate of return.

Q: Answer-The rule of 72 can be used to give an estimate of the time period in which an inves t ment amount ca...

The rule of 72 is a simple way to determine how long an investment will take to double i.e. grow by 100, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself. However , the Rule of 72 is reasonably accurate for low rates of return.