Be sure to show all your work- not just the answer. Follow this format: cite the

Question

Be sure to show all your work- not just the answer. Follow this format: cite the formula, then plug in numbers, then compute to show your final answer

1. What is the Rule of 72 ?

2. Solve using the Rule of 72: rate = 8%, years = 18, pv = $7,000. Solve for fv.

3. Solve, using the Rule of 72 rate = 4%, years = 18, fv=$8,000. Solve for pv.

4. Solve, using the Rule of 72: rate =6%, pv=$7,000, fv= $56,000. Solve for years.

5. Solve, using the Rule of 72: pv=$10,000; fv=$160,000; years=10. Solve for rate.

Explanation / Answer

1) RULE 72

A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the compound return into 72. The result is the approximate number of years that it will take for your investment to double.

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