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Day 6 of 40 Days to Make Your Money Count
The Rule of 72
You can calculate the number of years it will take to double your money by using “The Rule of 72.” Simply divide the interest rate into 72, and the answer is the number of years for your investment to double. This works, of course, no matter how much money is invested, but it doesn’t take taxes into consideration. For example, if you have an account that is earning 8%, you divide 8 into 72, and you find that it will take 9 years for your money to double.
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By Jim MunchbachThe Rule of 72
You can calculate the number of years it will take to double your money by using “The Rule of 72.” Simply divide the interest rate into 72, and the answer is the number of years for your investment to double. This works, of course, no matter how much money is invested, but it doesn’t take taxes into consideration. For example, if you have an account that is earning 8%, you divide 8 into 72, and you find that it will take 9 years for your money to double.