Using the Rule of 72, How Many Years Does It

question 27

Multiple Choice

Using the Rule of 72, how many years does it take for an account balance to double at an 8% interest rate?

• A) 10
• B) 9
• C) 8
• D) 7

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Definitions:

CPI

An index measuring the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Consumer Price Index

An index measuring the change over time in the price level of a market basket of consumer goods and services purchased by households.

Purchasing Power

The real value of money in terms of the quantity of goods or services that one unit of money can buy.

Annual Interest Rate

The percentage rate at which interest is charged or paid on an amount over a year.