The “Rule of 72” is a quick and simple way to estimate how your money can grow. You can use this rule in two ways.
(1) Divide 72 by the interest rate you expect to earn. This shows how many years it takes to double your money. Let’s assume you are going to be earning 6% interest on your money.
72 months/6 % interest = 12 months
(2) Divide 72 by the number of years in which you want your money to double. You will get an estimate of the interest rate you will need to earn.
Let’s assume you want your money to double in six years. Try it!
72 months/6 years = 12% interest
How many years will it take you to double your money with your choice of interest rate?
72 months/6% interest = ?