The Rule of 72

Many people that inherit large sums of money ask me; "How long it will take for their money to double?"  The answer lies in the Rule of 72. 

 

How long it will take your money to double depends on what interest rate you think is sustainable.  The rule of 72 is a simple trick you can use; let's learn how.  Simply, divide 72 into the interest rate and wha-la; you have the amount of years it takes for your money to double. 

 

At a 5% interest rate, you’ll double your money in 14.4 years.  (72 divided by 5)

 

At a 7% interest rate, you’ll double your money in 10.2 years.  (72 divided by 7)

 

At a 10% interest rate, you’ll double your money in 7.2 years.  (72 divided by 10)