Question

According to the rule of 72, t = StartFraction 72 Over r EndFraction which statement is true?
An investment of $3,100 will double in 12 years at a compound interest rate of 5%.
An investment of $9,000 will double in 10 years at a compound interest rate of 7%.
An investment of $4,500 will double in 8 years at a compound interest rate of 9%.
An investment of $3,000 will double in 4 years at a compound interest rate of 12%.

Answer 1

Use t = 72/r.

- For 5%: t = 72/5 = 14.4 (not 12) → false.
- For 7%: t = 72/7 ≈ 10.29 (not 10) → false.
- For 9%: t = 72/9 = 8 → true.
- For 12%: t = 72/12 = 6 (not 4) → false.

So only the third statement is true.