The "Rule
of 72" provides a quick and simple method to get a rough estimation of
doubling time. Just divide 72 by your annual rate of interest or
earnings. The result will tell you how many years it will take for your
money double (this does not take into consideration the effect of taxes).
For example, if
you earn a steady 6% per year, your initial investment would double in
about 12 years (72 ¸ 6 = 12). However, if you are lucky enough to earn
14.5% per year, you would double your investment in about 5 years. The
chart shows that even small increases in return rate can make a big
difference in how fast you may be able to achieve your financial goals.
