In rule 70, if the growth rate is equal to or more than 5%, we nee to replace 70 to _____ to get a good approximation?A.71B.72 C.75D.73
Question
In rule 70, if the growth rate is equal to or more than 5%, we need to replace 70 to _____ to get a good approximation?
A. 71
B. 72
C. 75
D. 73
Solution
The rule you're referring to is likely the "Rule of 70," which is a way to estimate the number of years it takes for an investment or your money to double with a given annual interest rate, using the formula 70 divided by the interest rate.
However, the Rule of 70 is an approximation and works best for interest rates between 6% and 10%. When the growth rate is lower or higher, the rule becomes less accurate.
If the growth rate is equal to or more than 5%, a better approximation would be to use the "Rule of 72." So, the answer to your question is B. 72.
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