Question
10) If you inherit $39,000 and want to double it in 9 years, using the Rule of 72, at what annual rate of return will you need to invest the money? Round your answer to the nearest whole percent, but do not include a % sign with your response.
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Answer to a math question 10) If you inherit $39,000 and want to double it in 9 years, using the Rule of 72, at what annual rate of return will you need to invest the money? Round your answer to the nearest whole percent, but do not include a % sign with your response.
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4.692 Answers
1. Using the Rule of 72, we have the formula:
\frac{72}{r} = \text{number of years to double the investment}
2. Substitute the given number of years (9 years) into the formula:
\frac{72}{r} = 9
3. To find the annual rate of return \( r \), rearrange the equation:
r = \frac{72}{9}
4. Compute the value:
r = 8
Therefore, the required annual rate of return is 8%.
2. Substitute the given number of years (9 years) into the formula:
3. To find the annual rate of return \( r \), rearrange the equation:
4. Compute the value:
Therefore, the required annual rate of return is 8%.
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