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tipweek: dailyfinancialquestion_12.htm Rule of 72

Daily Question

According to "the rule of 72":

 
 

Answer

b) The "Rule of 72" is a good estimation technique to understand how funds grow with compound interest. Money doubles when the earnings rate times the number of years equals 72. For example, money doubles in 10 years when it earns 7.2% and in 7.2 years if it earns 10%.