What is the primary purpose of the Rule of 72 in finance?

"To calculate the precise time it takes for an investment to triple" "To determine the interest rate required to double an investment" "To estimate the time it takes for an investment to double given a fixed annual rate of return" "To predict the future value of an investment based on market fluctuations"

How is the Rule of 72 typically calculated?

"Multiply the interest rate by 72" "Divide 72 by the annual interest rate" "Subtract the interest rate from 72" "Add the interest rate to 72"

At what interest rate percentage is the Rule of 72 considered most accurate?

"3%" "8%" "12%" "15%"

Which of the following is a limitation of the Rule of 72?

"It is not applicable to investments with variable interest rates" "It provides an exact calculation of the time it takes for an investment to double" "It is only useful for investments with extremely high interest rates" "It cannot be used to estimate the impact of inflation"

According to the provided text, what is a key benefit of using the Rule of 72 for investors?

"It guarantees a specific profit margin on investments" "It helps investors understand complex financial instruments" "It allows for quick and simple estimations of investment growth" "It eliminates the need for professional financial advice"