This simple formula tells you how long it will take for your money to double—while you sit back and relax (2024)

FAQs

This simple formula tells you how long it will take for your money to double—while you sit back and relax? ›

Do you know the Rule of 72? It's an easy way to calculate just how long it's going to take for your money to double. Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.

The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.

How Do You Calculate the Rule of 72? Here's how the Rule of 72 works. You take the number 72 and divide it by the investment's projected annual return. The result is the number of years, approximately, it'll take for your money to double.

It's called the Rule of 72. The principle is simple. Divide 72 by the annual rate of return to figure how long it will take to double your money. For example, if you earn an 8 percent annual return, it will take about 9 years to double.

The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. Dividing 72 by the annual rate of return gives investors a rough estimate of how many years it will take for the initial investment to duplicate itself.

Number of years to double the money = 72 / Interest Rate

The doubling period calculation can be done by “Rule of 72” if you invest money in different investment options like fixed deposits, savings accounts, mutual funds, etc.

Use the Rule of 72 to estimate how long it will take to double an investment at a given interest rate. Divide 72 by the interest rate to see how long it will take to double your money on an investment. Alternatively you can calculate what interest rate you need to double your investment within a certain time period.

The Rule of 72 is a well-known shortcut for calculating how long it will take for an investment to double if its growth compounds annually. Just divide 72 by your expected annual rate of return. The result is the number of years it will take you to double your money.

Do you know the Rule of 72? It's an easy way to calculate just how long it's going to take for your money to double. Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.

The Rule of 70 is a simplified way of determining the doubling time using the equation, doubling time = 70 / r , where r is the rate of growth for a population in percent. For example, if a population of 10 species were growing by two individuals a year, the r value would be 20%.

How to invest $5000 dollars for quick return? ›

We saw in the previous section that investing in the S&P 500 has historically allowed investors to double their money about every six or seven years. Your initial $1,000 investment will grow to $2,000 by year 7, $4,000 by year 14, and $6,000 by year 18.

The math behind this rule of 72 calculation is as follows: Calculation: 72 / Rate of Return = Years to Double. Example: 72 / 10% = 7.2 Years to Double.

The Basics

To figure out how long it will take to double your money, take the fixed annual interest rate and divide that number into 72. Let's say your interest rate is 8%. 72 ∕ 8 = 9, so it will take about 9 years to double your money.

Simply put, the Rule of 72 offers a quick and straightforward method for investors to estimate the number of years required to double their money at a consistent rate of return. The formula is simple. You divide 72 by your expected annual rate of return.

The rule of 8-4-3 when it comes to compounding indicates a style of investment that accelerates growth with time. Initially, a corpus doubles within 8 years through an average annual return of 12% subsequently another doubling happens for the same period after another 4 years following its initial setting up.

It's used to calculate the doubling time or growth rate of investment or business metrics. This helps accountants to predict how long it will take for a value to double. The rule of 69 is simple: divide 69 by the growth rate percentage. It will then tell you how many periods it'll take for the value to double.