Just by looking at the numbers, we know that an 8% rate of return is better than 4%. And that 10% is better than 8%. But what if you want to know how fast your money will double at your current rate? How are you going to compute for that? Fortunately, you can approximate the number of years by using a simple concept known as the Rule of 72.
The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself. (Investopedia)
Using the Rule of 72, we illustrate the number of years an investment will double given some of the interest rates found in the market today.
So where have you invested your money?
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