Financial House and CF Quadrants

Samuel has invested in a fixed deposit. What is the Rule of 72 primarily used for in this context?

• Calculating the time it takes for a population to double

• Determining the time it takes for Samuel's investment to double at a fixed annual interest rate

• Estimating the annual growth rate of Samuel's investment

• Calculating the exact interest earned on Samuel's investment over a year

If Priya invests in a savings account with a fixed interest rate, how can she use the Rule of 72 to estimate the number of years it will take for her investment to double?

• 72 / interest rate = years to double

• Interest rate / 72 = years to double

• 72 * interest rate = years to double

• Interest rate * 72 = years to double

Ava has invested $1,000 in a savings account with an annual interest rate of 6%. Approximately how many years will it take for Ava's investment to double according to the Rule of 72?

• 6 years

• 12 years

• 18 years

• 24 years

Which of the following is NOT a direct application of the Rule of 72 in finance?

• Estimating how long it takes for a country's GDP to double

• Calculating the time it takes for inflation to halve the value of money

• Determining the number of years it takes for a bond's value to double

• Predicting the exact date of stock market crashes

The Rule of 72 can also be applied to calculate:

• The time it takes for a loan to double in amount due to interest

• The exact amount of interest earned on an investment in one year

• The number of times interest is compounded in a year

• The annual inflation rate based on price increase

Historically, who said that the Rule of 72 (compound interest) is the most powerful force in the universe?

• Isaac Newton

• Leonardo Pisano Bigollo (Fibonacci)

• Albert Einstein

• René Descartes

If Kai invests $1,000 in a savings account with a 9% annual interest rate, the Rule of 72 estimates it will take how many years for his investment to double?

• 6 years

• 8 years

• 10 years

• 18 years

Why is the Rule of 72 considered a rule of thumb rather than an exact calculation when Charlotte uses it to estimate how long it will take for her investment to double?

• It only applies to investments made in the stock market

• It uses an approximation to simplify complex compound interest calculations

• It can only be used for interest rates between 1% and 12%

• It was created before the invention of calculators and computers

Emma, Samuel, and Hannah are discussing how quickly they can double their savings. In what type of educational curriculum would they learn about the Rule of 72 to help with their calculations?

• History

• Science

• Mathematics

• Literature

Hannah is planning to invest her savings. She wants to double her investment and is using the Rule of 72 to estimate how long it will take. What mathematical concept is the Rule of 72 based on to provide these estimates?

• Simple interest

• Compound interest

• Arithmetic progression

• Geometric progression