Rule 72

‘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:

Time3%6%12%
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.

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