Estimating average annual inflation rate by using rule 72


Task: Solve the following using The Rule of 72. Show all work.

Question1. You anticipate earning 8% per year on your investment. When you invest $3000 today, how much will your investment be worth in the 9 years?

Question2. You desire to have $40,000 accessible to finance a trip around the world in 12 years. You estimate which you can earn 12% on your investment. How much do you require to deposit today to meet your goal?

Question3. A new Grady White fishing boat cost $5000 in 1979. Today, the extremely same boat costs around $40,000. Estimate the average annual inflation rate, by using the Rule of 72.

Question4. You invest $2000 today and anticipate earning 9% per year. How many years will it take for your investment to grow to $32,000?

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Financial Accounting: Estimating average annual inflation rate by using rule 72
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