Rule of 72 Worksheet

Understand and apply the Rule of 72 to estimate investment doubling time and required interest rates for Grade 12 financial literacy.

Grade 12 Math Financial LiteracyRule of 72

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Includes

Fill in the Blanks2 Short AnswerMultiple ChoiceTrue / FalseLong Answer

Standards

CCSS.MATH.CONTENT.HSF.IF.C.7.ECCSS.MATH.CONTENT.HSF.LE.A.4

Topics

MathFinancial LiteracyRule of 72InvestmentsCompound Interest

8 sections · Free to use · Printable

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Read each question carefully and use the Rule of 72 to estimate the answers. Show your work where applicable.

1. The Rule of 72 is a simplified way to determine how long an investment will take to at a given fixed annual rate of interest.

2. To calculate the approximate number of years it will take, you divide 72 by the annual rate.

3. The Rule of 72 works best for interest rates between % and %.

1. If you invest $1000 at an annual interest rate of 6%, approximately how many years will it take for your investment to double?

2. An investment portfolio is growing at an average annual rate of 9%. How long will it take for the value of the portfolio to double?

1. You want your investment of $5000 to double in 8 years. What annual interest rate would you need to achieve this, according to the Rule of 72?

2. To double your money in 4 years, what approximate annual interest rate is required?

1. Which of the following interest rates would cause an investment to double in approximately 12 years?

12%

2. If an investment doubles in approximately 18 years, what was the approximate annual interest rate?

1. The Rule of 72 provides an exact calculation for the doubling time of an investment.

True

False

2. If an investment doubles in 6 years, the annual interest rate is approximately 12%.

True

False

1. Explain why the Rule of 72 is a useful tool for financial planning, and describe a scenario where it would be particularly helpful.

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