Rule Of 72

How long will it take your investment money to double?

It's easy! Divide the number 72 by the percentage rate you are paying on your debt, or earning on your investment. Here are two examples:

You borrowed $100 from your friend, who is charging you 9% interest. 72 divided by 9 is 8. That makes 8 the number of years it would take for your debt to your friend to double to $200 if you did not make any payments.

You have a savings account with $1000 deposited in it. It earns 6% interest from the bank. 72 divided by 6is 12. It will take 12 years for your $1000 to double to $2,000 if you don't make any deposits.

Remember: 72 divided by the interest rate is the number of years it takes to double.

Albert Einstein is credited with discovering the compound interest rule of 72. Referring to compound interest, Albert Einstein is quoted as saying:

"It is the greatest mathematical discovery of all time"

 

 

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