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You want intelligent decisions when it comes to your investments?
The Rule of 72 is a helpful tool that allows you to estimate without complicated formulas and financial equations, how long it takes to double an investment.
In this post, you'll learn exactly what the Rule of 72 is, how it works and how you can apply it.
Bonus: With the 72 calculator you can easily calculate your potential return!
The Rule of 72 is a useful Financial toolwhich you can use to estimate how long it would take for your Double investments.
The Calculation is very simpleDivide the number 72 by the expected return on your investment, and the result is the approximate number of years it would take for your money to double.
Simple, isn't it? Let's have a Example make.
For example, if you invest in an asset with a Yield from 8 % invest, it would be about 9 years take time for your Investment doubled (72 divided by 8 = 9).
With a little practice, the calculation of 72 is easy to do in your head. You can also use a calculator or, for example, our Rule of 72 calculator use.
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The 72 Calculator is a financial calculator that allows you to calculate how long it will take for investments to pay off. Double at different fixed interest rates.
Where and how you can use the 72 calculator?
Let's say you are thinking of making one of the following two investments:
Now when does which of the above Investments a doubling?
With the rule of 72 we can calculate that it is just under 11 years would take until Investment 1 doubled (72 divided by 6.7 = 10.7).
With investment 2 it takes 12 yearsuntil Investment 2 doubled (72 divided by 6.0 = 12).
So if you're looking for a faster return, Investment 1 might be the better choice for you.
The Rule of 72 is a great tool to make informed decisions about your investments. That's how you get the best out of her:
"Intelligent people learn from the mistakes of others".
We have compiled our top selection for you from all our tests and experience reports:
Basically, the Rule of 72 is a useful tool for the Estimating the return on individual investments. The rule can help you understand when to start, 1001TP3Gain from your investments or when your money has doubled.
Was the Rule of 72 already known? Feel free to share in the comments where you use them in your everyday life.
To understand how compound interest doubles your investments, you should read the Contribution about long-term investments be sure to read.