Rule Of 72 đź“Ź

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Have you heard of the Rule of 72. It’s a simple concept all finance peeps should know. The Rule of 72 is a simplified formula that calculates how long it'll take for an investment to double in value, based on its interest rate (compounded annually.)

But, how does it work?

It couldn’t be easier. For reals. 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, just divide 72 by 8. That gets you 9. So, if you earn 8%, your money will double in roughly 9 years.

This also works in reverse 🔄 If you wanna double your money in 9 years, you will need to earn 8%, APR.

Thanks for stopping by!

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8 comments
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So if it's 10% then 7.2 years yeh? Seems very simple.

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Love the rule of 72 it’s become part of my mental models and how I look at time and interest rates I immediacy use it to calculate things

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Excellent. I'd heard of this awhile ago, but forgot how the formula worked. This is the kind of practical informational posts we need to see more of.

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Just buy bitcoin and double your money in six months.

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