PRC-2 · Chapter 4 · Question 41 of 60
The 'Rule of 72' is a quick mental shortcut used to estimate:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The time required for an investment to double at a given compound interest rate.
Explanation
By dividing 72 by the annual interest rate, you get an approximate number of years it takes for your money to double (e.g., at 6%, it takes ~12 years).
More Linear Programming MCQs
- Q43What is 'Amortization' in the context of a loan?
- Q44If the nominal rate is 12% and compounding is monthly, what is the 'periodic rate' used in calculations?
- Q45Which of the following is the standard formula for Compound Interest (A)?
- Q46A matrix with the same number of rows as columns (e.g., 2x2 or 3x3) is known as a:
- Q47A square matrix where all diagonal elements are 1 and all other elements are 0 is called a/an: