Rule Of 72

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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.

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BREAKING DOWN '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
  1. 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 >>
  2. 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 >>
  3. Is it easier to save for retirement if you start earlier in life? Can I make up for ...

    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 >>
  4. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
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    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
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