The rule of 72 says that an investment earning 6% annually will double in how many years?

The rule of 72 is a simple formula used to estimate the number of years required to double an investment at a fixed annual rate of return. According to this rule, you divide the number 72 by the annual interest rate (expressed as a percentage).

In this case, with an interest rate of 6%, you would perform the calculation:

72 ÷ 6 = 12.

This result indicates that at an annual interest rate of 6%, the investment will approximately double in 12 years. The rule of 72 is particularly useful because it provides a quick, mental math way to assess investment growth, making it a popular tool among investors.

The other options do not align with the calculation using the rule of 72. For instance, 6 years or 10 years would significantly underestimate the time needed for the investment to double at the 6% rate, while 72 years reflects the total of years to return to the initial investment rather than the doubling time. Thus, the correct answer is indeed 12 years.