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    Personal Finance: Rule 72

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    1. Using the rule 72, approximate the following amounts
    a. If the value of land in an area is increasing 6 percent a year, how long will it take for property values to double?
    b. If you earn 10 percent on your investments how long will it take your money to double?
    c. At an annual interest rate of 5 percent how long will it take for your savings to double?

    3. A family spends $34,000 a year for living expenses. If prices increase by 4 percent a year for the next three years, what amount will the family need for their living expenses after three years?

    4. Ben Collins plans to buy a house for $120,000. If that real estate is expected to increase in value by 5 percent each year what will its approximate value be in 7 years from now?

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    Solution Preview

    (1) (a) Time taken = 72/6 = 12 years

    (b) Time taken = 72/10 = 7.2 ...

    Solution Summary

    Rule 72 for personal finance is examined. A complete, neat and step-by-step Solution is provided.