What is the Rule of 72?
April 28, 2008 by Josie Kay · Leave a Comment
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Q. Someone mentioned the Rule of 72. What does it mean?
Josie’s answer - I love the rule of 72 which is a very handy to remember.
It is known as the rule of 72 because it can give you a quick answer as to how quickly your investment can grow by re-investing your investment’s earnings. It tells you how many years (give or take a month) it will take to double your money at a given rate of return.
You need to start with the number ‘72’. You then determine what rate of return you expect to get on your investment. By dividing this return into 72 you will know for how many years you need to invest to double your money. Read more
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