Using the Rule of 72,approximately How Long Will It Take

question 90

Multiple Choice

Using the Rule of 72,approximately how long will it take to double your money if you invest it at 8% compounded annually?

• A)6 months
• B)9 months
• C)6 years
• D)9 years
• E)It depends on the amount of the initial investment.

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Definitions:

Permanent Accounts

Accounts on the balance sheet that carry over their ending balances into the next financial period, such as assets, liabilities, and equity accounts.

Assets and Liabilities

Essential components of a financial statement, with assets representing what a company owns and liabilities what it owes.

Reversing Entry

An accounting technique that negates the impact of the previous entry, often used to simplify bookkeeping for accruals and deferrals.