Rule of 72

Rule of 72

Here is a question for you to solve using the Rule of 72. Question: In 1967, tuition, room & board at a private college costs $3000. In 2007, the same services cost $48,000. Find the avereage annual rate of college-cost inflation, using the Rule of 72. Hint: first, estimate the number of doubles. Since each double represents 72 compounding percents, you can then find the total number of compounding percents. Finally, plug-into the formula rate * time = total compounding percents, and solve for rate.

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