The rule of 72 is a real quick, useful formula that is used to estimate the number of years required to double the invested money at a given annual compounded rate of return.
It's really simple, if you just divide 72 by the expected rate of return, it will tell you. So for example, if you go 72/10, it will take 7.2 years to double your money. If you go 72/15, you will double your money in 4.8 years.
What's cool about this formula is that you can also calculate the annual rate of compounded return that is required from an investment depending on how many years you expect to double your investment. So if you go 72/7.2, this will equal 10%. If you go 72/4.8, the result will be 15%.
Submitted September 08, 2022 at 02:00AM by ValueAssets https://ift.tt/j6QAOMi
