Finance
In Louisiana, the 'Rule of 72' is a quick calculation that estimates:
AThe number of transactions needed to generate a target income
BThe number of years required to double an investment at a given interest rate (divide 72 by the interest rate)✓ Correct
CThe maximum debt-to-income ratio allowed
DThe number of months before a mortgage is half paid off
Explanation
The Rule of 72 is a financial shortcut: dividing 72 by the annual interest rate gives the approximate number of years to double an investment. At 6%, money doubles in about 12 years (72 ÷ 6 = 12). Useful for quick investment comparisons.
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