3. The Rule of 72 is a very useful approximation for understanding exponential growth. The Rule states that (72/ the interest rate) = doubling time. For example, if the interest rate is 10% and you invest $10 today, in 7.2 years you will have $20. (72/10 = 7.2, the doubling time) My sister, a financial planner, would suggest that you save today for peace of mind. So today, let's put $1,000 in a mutual fund that rather consistently yields 12%. You plan to retire at age 62. How much will the investment be worth at retirement, if you are now 50 years old? How much, if you are now 38 years old? How much, if you are now 20 years old?
3. The Rule of 72 is a very useful approximation for understanding exponential growth. The Rule states that (72/ the interest rate) = doubling time. For example, if the interest rate is 10% and you invest $10 today, in 7.2 years you will have $20. (72/10 = 7.2, the doubling time) My sister, a financial planner, would suggest that you save today for peace of mind. So today, let's put $1,000 in a mutual fund that rather consistently yields 12%. You plan to retire at age 62. How much will the investment be worth at retirement, if you are now 50 years old? How much, if you are now 38 years old? How much, if you are now 20 years old?
Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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Transcribed Image Text:3. The Rule of 72 is a very useful approximation for understanding exponential growth. The Rule
states that (72/ the interest rate) = doubling time. For example, if the interest rate is 10% and
you invest $10 today, in 7.2 years you will have $20. (72/10 = 7.2, the doubling time)
My sister, a financial planner, would suggest that you save today for peace of mind. So
today, let's put $1,000 in a mutual fund that rather consistently yields 12%. You plan to retire
at age 62.
How much will the investment be worth at retirement, if you are now 50 years old?
How much, if you are now 38 years old?
How much, if you are now 20 years old?
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