Which of the following describes the 'Rule of 72' in personal finance?
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Explanation
The Rule of 72 is a simple mental math shortcut: divide 72 by the annual return rate to estimate how many years it takes for money to double. At 6% annual return, money doubles in about 12 years (72 รท 6). At 9%, it doubles in 8 years. This illustrates the dramatic impact of investment returns on long-term wealth.
Financial literacy education has been shown to improve long-term savings rates, reduce reliance on high-interest debt, and increase retirement readiness.