According to the rule of 72, if Randall invests $700 and $1900 into two separate accounts with the same interest rate, which amount will double faster? A. Both will double at the same rate. B. $1900 C. $700 D. None of the above
The answer is A.) Both will double at the same rate. Now I am going to explain how I know. If the interest rate of each is 1% this means that 1% of each will be added to the accounts per month. $1900 x 1% is $19 per month. $700 x 1% is $7 per month. Now I will divide 1900 by 19 to find how many months it will take to double the money in that account. It will take 100 months for the account with $1900 in it to double. Now I will multiply $700 by $7 to get 100 months also. This means that each account will take 100 months to double so your answer is A.) Both will double at the same rate.
