The Rule of 72 is a simplified way to find how long it will take to double your investment. For example: 72 divided by 6% interest equals 12 years to double your money. I find the Rule of 72 very useful if you want to make some quick estimates and don’t have a calculator handy.
Rate of Return | Rule of 72 | Actual # of years |
2% | 36 | 35 |
5% | 14.4 | 14.2 |
7% | 10.3 | 10.2 |
25% | 2.9 | 3.1 |