While the rule of 72 is a useful rule of thumb to estimate investment returns, using an online calculator or a compound growth formula may yield more accurate results.
Investment Analysts JournalSANDLER, L. (1974). A note on the rule of 72 or how long it takes to double your money. The Investment Analysts Society of South Africa, [Online], vol. 4, Available: http://www.iassa.co.za/articles/003_nov1973_05.pdf, [Accessed 24 March 2011]...
But, if you start with $15,000, you’ll need your money to double 3 times in the next 10 years. This means you’ll want your money to double every 3.3 years and with a 21.8% (72 / 3.3) annual rate of return on your investment. If you areinvesting for retirement, the Rule of ...
How long does it take to double your money? The traditional advice says to use the rule of 72—take 72 and divide it by your expected annual return to calculate the numbers of years to double your money. So, if you expect your wealth to grow by 4% a year, then dividing 72 by 4 ...
If you want to figure out how long it will take to double your money in an investment, you use the “Rule of 72.” But income investors can put this rule to work, too, to figure out just how quickly their dividends will pile up. I’ll show you how – and I’ll show you five...
to investment advisors or brokerage firms and never look back. If you’re looking to make your money grow faster than inflation, though, you need to pay a bit of attention, take a deep breath, and put your money in some solid performing stocks, bonds, or an exchange-traded fund (ETF)...
Time to double = 72 /Interest Rate The time to double is in years, and the Interest Rate is the annual interest rate expressed as a percentage. How to Solve To apply the Rule of 72, follow these steps: Identify the annual interest rate of your investment, expressed as a percentage (not...
Deriving the Rule of 72 Let us derive the Rule of 72 by starting with a beginning arbitrary value: $1. Our goal is to determine how long it will take for our money ($1) to double at a certain interest rate. Suppose we have a yearly interest rate of “r”. After one year, we ...
While the Rule of 72 provides useful estimates, several factors can extend the actual time needed to double your money. Inflation, often averaging 2% to 3% annually, erodes purchasing power. A 7% investment return during 3%inflationonly provides 4% in real returns, extending your doubling time ...
money into a company that looks like the next big thing. Penny stocks can double your money in a single trading day. Just keep in mind that the low prices of these stocks reflect the sentiment of most investors, and thus the view of most is that some literally aren't even worth a ...