DEFINITION of 'Rule Of 72'
A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the compound return into 72. The result is the approximate number of years that it will take for your investment to double.
INVESTOPEDIA EXPLAINS 'Rule Of 72'
For example, if you want to know how long it will take to double your money at 12% interest, divide 12 into 72 and you get six years.
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RELATED FAQS

What is the difference between the rule of 70 and the rule of 72?
The rule of 70 and the rule of 72 give rough estimates of the number of years it would take for a certain variable to double. ... Read Full Answer >> 
How do I calculate how long it takes an investment to double (AKA 'The Rule of 72') ...
You can calculate the approximate amount of years it would take an investment to double, given the annual expected rate of ... Read Full Answer >> 
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In general, the earlier you start saving for retirement, the easier it will be to afford, given the number of financial obligations ... Read Full Answer >> 
How do I use the rule of 72 to estimate compounding periods?
The rule of 72 is best used to estimate compounding periods that are factors of two (2, 4, 12, 200 and so on). This is because ... Read Full Answer >> 
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