What is the Rule Of 72

The rule of 72 is a fast way to estimate the number of years it will take you to double your money at a set interest rate. 

The rule states that you divide the Interest rate by 72 

Years required to double investment = 72 ÷ annual interest rate 

If you want to calculate the period it will take to double your money, let us assume you get 10% interest per year: 

72 ÷ 10(%) = 7.2 Years 

The rule can also be used to find the amount of time it takes for money's value to halve due to inflation. If inflation is 6%  

72 ÷ 6(%) = 12 years.   

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