The Rule of 72
01.The Mental Math Trick
How long will it take for your savings to double in size? Mathematicians use a shortcut called the Rule of 72. It is a simple way to calculate when your money will multiply by two.
02.How to Use It
Take the number 72 and divide it by the interest rate you are earning. The answer is the number of years it will take for your money to double. For example, if you earn a 6% interest rate, divide 72 by 6. The answer is 12! Your money will double in 12 years without you adding another penny.
03.Comparing Rates
If you get a 10% rate, 72 divided by 10 is 7.2 years. If you only get a 1% rate, it takes 72 years! This rule shows why finding a good interest or investment rate makes a huge difference in your financial planning.