THE RULE OF 72 The rule of 72 is a quick way to show how long it - TopicsExpress

THE RULE OF 72 The rule of 72 is a quick way to show how long it will take to double your money. The equation for the rule of 72 is: Number of years for money to double = (72/Annual Interest Rate) interest rate At 8% interest, it will take 72/8 = 9 years for your money to double. Here are more examples: At 6%, it will take 12 years (72/6 = 12). At 12%, it will take 6 years (72/12 = 6). The rule of 72 is a shortcut to estimate the magic of compound interest that makes your money grow. • Remember that the rule of 72 is an approximation and its accuracy reduces as the interest rate becomes high.