To estimate the number of years it will take for an investment to double with a fixed annual interest rate, you can use the Rule of 72. The Rule of 72 is a simple formula used in finance to quickly determine the doubling time through compound interest. This is done by dividing 72 by the annual interest rate.
In this case, the interest rate is 4.4%. Here's the calculation:
Years to double = 72 / Interest Rate
Years to double = 72 / 4.4
Now let's do the math:
Years to double ≈ 72 / 4.4
Years to double ≈ 16.3636... (rounded off, it's approximately 16.36)
However, looking at the provided options, none of them is 16.36 years. It seems there might be a mistake in the options or in how the question is interpreted. Since the closest option to our calculated 16.36 years is not listed, it's possible that the options themselves are incorrect.
Given the correct application of the Rule of 72, it would take approximately 16.36 years for Thurman's money in a CD paying 4.4% interest to double. None of the options A, B, or C are close to this number. However, if you must choose the closest incorrect option, B. 20.5 years is the closest to the correct calculation.
