There is a rule of thumb which can be used as an approximation called the Rule of 72 to find interest or period of time, given the other quantity, and it is given as ni=72. If $1 is invested for 10 years, what compound rate is necessary for the money to double?

i=7.2%

Explanation:

Giving the following information:

There is a rule of thumb which can be used as an approximation called the Rule of 72 to find interest or period, given the other quantity, and it is given as ni=72

We have $1 for 10 years. We will assume that it needs to duplicate in 10 years.

Years to double = 72/interest rate

10=72/i

i=72/10 = 7.2

Control:

FV = 1 * (1.072^10) = 2