Featured Article

The Rule Of 72

Here is a neat trick to do a quick approximate calculation of how long it will take to double your money at various interest rates. (Of course in today’s market we are all pleased just not to to suffer losses – but think positive!)

Use the number 72 and divide by your interest rate.  For instance, if you have money invested in a 4% certified deposit – divide 72 by 4 – and you get 18.  Your money will double at 4% in approximately 18 years.  This also clearly points out why we all tend to chase higher returns.  Money that returns 10% doubles in a little over 7 years.

Keep in mind this is not an exact calculation, but it works well at rates of up to about 15%. 

This entry was posted in Life, Management. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *