Mika
VIP Contributor
The Rule of 72 is a simple rule that tells you when your money is going to be doubled. This rule also tells you at what percentage should you invest your money so that it doubles in a certain time. Let me exemplify.
Let’s say you have invested your money for a 12 percent annual return. According to the Rule of 72, you will have to divide 72 by 12 (interest rate). The result will be 6. So, your money will double in 6 years. If you invested for 10 percent, your money will double in 72/10 =7.2 years.
If you want to calculate when it is going to be 3 X, instead of 72, try 114, and if you want to find out when it is going to be 4 X, use 144.
Let’s say you have invested your money for a 12 percent annual return. According to the Rule of 72, you will have to divide 72 by 12 (interest rate). The result will be 6. So, your money will double in 6 years. If you invested for 10 percent, your money will double in 72/10 =7.2 years.
If you want to calculate when it is going to be 3 X, instead of 72, try 114, and if you want to find out when it is going to be 4 X, use 144.
