‘Rule of 72’ is a simplified 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 can get a rough estimate of how many years it will take for the initial investment to duplicate itself. The chart below give you a quick overview of how this works.
Invest $1,000 at:
|6 years||$ –||$ –||$ 2,000.00|
|12 years||$ –||$ 2,000.00||$ 4,000.00|
|24 years||$ 2,000.00||$ 4,000.00||$ 16,000.00|
|48 years||$ 4,000.00||$ 16,000.00||$ 256,000.00|
*These examples are hypothetical and for illustrative purposes only. The rates of return do not represent any actual investment and cannot be guaranteed. Any investment involves potential loss of principal.