The Rule of 72

question 76

Multiple Choice

The Rule of 72

• A) can be used to determine the amount of time it takes to double an investment.
• B) is fairly accurate for interest rates between 25 and 50 percent.
• C) states that the time to double your money approximately equals 72/i, where 72 represents the years it takes to double your investment.
• D) None of the above describe the Rule of 72.

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Definitions:

Incremental Cost

The additional cost associated with producing one more unit of a product or service.

Period Cost

Costs that are not directly tied to the production process and are expensed in the period in which they are incurred.