Using the standard financial planning 'Rule of 114', approximately how many years will it take for an investment to triple in value at an annual return of 9.5% p.a.?

[ A ]Approximately 25.0 years

[ B ]Approximately 12.0 years[ CORRECT ]

[ C ]Approximately 7.6 years (Doubling time)

[ D ]Approximately 6.0 years

Takeaway

At 9.5% p.a., the Rule of 114 estimates that the investment will triple in approximately 12.0 years.

Derivation

Step 1: Rule of 114 is the tripling-time analogue of the doubling-time Rule of 72, approximated as Tripling Time ≈ 114 / annual return rate. Step 2: Substituting r = 9.5: 114 / 9.5 = 12.0 years. This is a quick mental-math heuristic financial planners use with clients instead of solving the exact compound-interest equation (1+r)^n = 3 for n, and it is tested alongside the more familiar Rule of 72 (doubling) precisely because candidates often default to applying 72 by habit even when the question explicitly asks about tripling, producing the wrong constant in the numerator.

Why the others fail

A — Approximately 25.0 years

25.0 years significantly overstates the tripling time implied by a 9.5% return — applying 114/9.5 correctly yields roughly half that duration.

C — Approximately 7.6 years (Doubling time)

7.6 years is the doubling time obtained via the Rule of 72 (72/9.5), which answers a different question (time to double) rather than the tripling time the Rule of 114 is meant to estimate.

D — Approximately 6.0 years

6.0 years understates the actual tripling period; even the faster doubling time (Rule of 72) at this rate is longer than 6 years, so tripling cannot occur in fewer years than doubling.