Question

Assume that you invest $550 in a certificate of deposit that has an annual interest rate of 4.5 percent. According to the rule of 72, what will your investment be worth after 16 years

Answer 1

Answer:

$1,100

Explanation:

Calculation for what will the investment be worth after 16 years

Rule of 72 is the rule or methods which help in estimating an investment's doubling time.

Therefore According to the rule of 72 what we are going to do is to double the amount of money invested in the Certificate of deposit which was $550

Hence,

Since $550 was invested at an annual interest rate of 4.5%. Thus the rule of 72 tells us that the money will double every 16 years,

Approximately:

Years Balance

Now $550

16 $1,100

( The amount of $550 doubles every  16 years)

Therefore what the investment be worth after 16 years will be $1,100