PLEASE HELP ASAP What is the rule of 72 used to determine?

A. the approximate time it takes an investment to triple in value

B. the approximate time it takes an investment to double in value

C. the approximate time it takes to earn 10% interest

D. the approximate time it takes to earn $72 on any investment amount

B

Explanation:

So, lets go over what the rule of 72 is.

First off, the formula is:

The t stands for time in years.

The r stands for the intrest percentage.

So bascially, t is just 72 divided by the intrest rate.

So we know what the forumla/varaibles is, but what is it used for?

Well, lets plug in a number and see.

How about we go with an intrest rate of 8%? This is the most accurate percentage to use with the rule of 72, and the numbers get more and more inaccurate as you go higher or lower than this percentage:

t=72/8

=

t=9

So we know that it takes 9 years to do...what exactly?

Well, lets see, if you multiply 72 by 108% 9 times, what do you get? Remember that parehteses are important, and if you are testing this on a calculator, you should do 72*(1.08^9):

Well, 1.08 to the ninth power is 1.999

Times this by 72, and you get: 143.28

This is not 100% accurate, but as you can see, its very close to DOUBLING the value.

So, we know that it would take 9 years in this situation to double our value, or in other words:

9 years is the approximent time it takes to double our value, or investment.

This looks almosted exactly like B.

Hope this helps!

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