The rule says that to find the number of years required to double your money at a given interest rate, you just divide the interest rate into 72.
For example, if you want to know how long it will take to double your money at eight percent interest, divide 8 into 72 and get 9 years.
Does money double every 10 years?
The Rule of 72 states that the amount of time required to double your money equals 72 divided by your rate of return. For example: If you invest money at a 10 percent return, you will double your money every 7.2 years. If you invest at a 7 percent return, you will double your money every 10.2 years.
At what annual rate of interest compounded yearly Will money double in 8 years?
When interest is compounded annually, a single amount will double in each of the following situations: The Rule of 72 indicates than an investment earning 9% per year compounded annually will double in 8 years.
What interest rate will double an investment over 6 years?
The Rule of 72 can also be used to estimate the interest rate necessary to double the value of an investment in a particular number of years. For example, to double an investment in 6 years requires an interest rate of about 72/6 = 12 percent. CONTENTS: Accuracy of the Rule of 72.
How can I double my money in 5 years?
This is the number of years it will take for your money to double. For example, if your money is earning an 8 percent interest rate, you’ll double your money in 9 years (72 divided by 8 equals 9). Or, if your money is earning a 5 percent interest rate, you’ll double it in 14.4 years (72 divided by 5 equals 14.4).