If the interest earned by a CD is compounded annually, which rule is most accurate when calculating how long it will take the money invested in the CD to double?

A. Rule of 69
B. Rule of 72
C. Rule of 12
D. None of the above

Question

If the interest earned by a CD is compounded annually, which rule is most accurate when calculating how long it will take the money invested in the CD to double?

 		A.	Rule of 69
 		B.	Rule of 72
 		C.	Rule of 12
 		D.	None of the above

anonymous · Answer

@perl

perl · Answer

this is hard to say,

perl · Answer

The value 72 is a convenient choice of numerator, since it has many small divisors: 1, 2, 3, 4, 6, 8, 9, and 12. It provides a good approximation for annual compounding, and for compounding at typical rates (from 6% to 10%). The approximations are less accurate at higher interest rates.

perl · Answer

http://en.wikipedia.org/wiki/Rule_of_72#Choice_of_rule

anonymous · Answer

ikr ughhh @perl

perl · Answer

i think the rule of 72 will work, since it says its a good choice for annual compounding

perl · Answer

it is good for compounding at typical rates (6% to 10%)

anonymous · Answer

ok thanks @perl

perl · Answer

for continuous compounding it recommends using 69