In its first 10 years a mutual fund produced an average annual return of 20.71%. Assume that money invested in this fund continues to earn 20.71% compounded annually. How long will it take money invested in this fund to double
Using the economic principal the rule of 72 we can divide 72 by the average annual rate of return to determine when an investment will double in value. 72/20.71 results in approximately 3.48 years to double in value.
