The Rule of 72
The Rule of 72 can be used to help you calculate the approximate number of years it takes to double your money. Simply divide 72 by the rate of return and you will get the approximate number of years it takes to double your money. For example, if the rate of return is 4% per annum, 72 ÷ 4 = 18, it means that it will take about 18 years for your money to double. The same rule can be applied to debts as well. For example, if your credit card interest rate is 24% per annum, 72 ÷ 24 = 3, your credit card debt will double in 3 years if you do not pay up! A $10,000 debt will balloon to $20,000 in just 3 years!
The Rule Of 72 (VideoScribe)
The Rule of 72 can help you determine the approximate number of years it takes for a sum of money to double given an annual interest rate.