According to the Rule of 70, If the Interest Rate

question 114

Multiple Choice

According to the rule of 70, if the interest rate on a bank deposit is 5% per year, how long will it take for the bank deposit to double in value?

• A) 25 years
• B) 20 years
• C) 14 years
• D) It depends on the amount of bank deposit.

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Definitions:

Annuity

A finance-related product designed to issue a predetermined series of payouts to an individual, typically aimed at serving as an income source for retirement.

Net Present Value

A calculation that compares the present value of cash inflows to the present value of cash outflows over a period of time, used in capital budgeting to assess profitability of investments.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment or to compare the efficiency of several different investments.

Straight-Line Depreciation

A method of allocating an asset's cost evenly throughout its useful life.