Rule of 72 Worksheet
Explore the Rule of 72 to estimate investment doubling time and growth rates in financial literacy.
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Rule of 72 Worksheet
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Read each question carefully and use the Rule of 72 to calculate the answers. Show your work where applicable.
1. What does the Rule of 72 primarily help you estimate?
The exact interest earned on an investment
The time it takes for an investment to double
The total amount of a loan repayment
The future value of an annuity
2. If an investment earns 6% annual interest, approximately how long will it take for the investment to double?
10 years
12 years
15 years
18 years
3. The Rule of 72 states that to find the approximate number of years it will take for an investment to double, you divide 72 by the annual .
4. If an investment doubles in 9 years, the approximate annual interest rate is %.
5. You are considering two investment options. Option A offers an 8% annual return, and Option B offers a 4% annual return. Using the Rule of 72, calculate the approximate doubling time for each option. Which option doubles faster, and by how many years?
6. The Rule of 72 provides an exact calculation for the doubling time of an investment.
True
False
7. Explain why understanding the Rule of 72 is important for personal financial planning and investment decisions. Provide an example.