Rule Of 72 |
| An arithmetic equation used to calculate how many years it would take for an investment to double in value, given knowledge of its annual rate of return and reinvestment (compounding) of income. The rule says that if you divide the compound growth rate of any investment into 72, you get the approximate number of years it takes to double your money. A return of 12% would double the investment in 6 years, while a return of 2% would double the money in 36 years. |
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