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.
Solution
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.
More Ethics Questions
- What does impartiality mean?
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- What is the cognitive component of attitudes related to?
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- What does the concept of "cultural relativism" in ethics suggest?
- When a public servant accepts a gift from a vendor, what ethical principle is at risk?
- What does responsiveness refer to in a professional context?
- Why is effective networking important in the workplace?
- Which theory suggests that people are motivated by a hierarchy of needs, starting with basic physiological needs and progressing to self-actualization?
- What is a characteristic of emotional self-regulation?
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