RULE OF 72

HOW IT WORKS

• If we know the interest rate.
• Divide 72 by the interest rate to find the number of years.

TIME EXAMPLE

• Let’s say we have $2000 in a savings account earning interest at a rate of 8%.
• 72 / 8 = 9 years
• It would take 9 years at 8% to double the amount of money in the account.

HOW IT WORKS

• If we know the time frame in which the money needs to double.
• Divide the 72 by the number of years.

INTEREST EXAMPLE

• Let’s say we have $5000 and we need it to double in value in 6 years.
• 72 / 6 = 12%
• We would need to invest the money in an account earning 12% to double the value in 6 years.