1. Home
  2. The rule of 72

The rule of 72

The rule of 72 is used to find the number of years it takes to double your money at a given interest rate.

(72/[interest rate]) = years until a principle doubles



So, how long will it take to double your money at eight percent interest? Divide 8 into 72 and you get 9 years.



If you collect 7% on your savings in a little over 10 years the amount will be double what it is today.


The rule of 72 also means that you can determine the time
it takes for a population to double if it is growing at a steady rate by solving this function:

(72/[rate of growth]) = years for population to double

Reference: http://www.moneychimp.com/features/rule72.htm

More from this shelf

Investing facts, tip about hot stocks

The price of hot stocks like IPOs and tech stocks can rise and fall suddenly.

"In these fast markets when many investors want to trade at the same time and prices change quickly, delays can develop across the board. Executions and confirmations slow down, while reports of prices lag behind actual prices. In these markets, investors can suffer unexpected losses very quickly."

"To avoid buying or selling a stock at a price higher or lower than you wanted, you need to place a limit order rather than a market order. A limit order is an order to buy or sell a security at a specific price. "

Another fact