post fin201 unit 2 discussions
Question # 00028242
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Updated on: 10/14/2014 01:20 AM Due on: 11/21/2014
Unit 2.1 DB: How to use "Rule of 72" to estimate
The Rule of 72 states that IF rate*time=72, your investment will double.
Referring to the example if $1000 grows to $2000 in ten years, you see that this is a double. Thus, rate * time=72. Plug in the 10 years for time, and the formula becomes...rate * 10 years=72. Thus, rate=7.2%!
QUESTIONS:
- Using the Rule of 72, estimate how long it will take to double your investment if you earn 6%?
- If you earn 8%?
- If you earn 12%?
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