Rule of 72 means fomula that estimates the amount of time it takes for an investment to double in value ,earning a fixed annual rate of return is called rule of 72.It is simple
calculation is dividing 72 by the annual interset rate.
Using the rule of 72:-
Example 1.
If your investment earn 12% a years ,It would take about 72/12=6 years
Example 2.
If your investment earn 4% a year ,It would take about 72/4=18 years
:: It will take approximately 18 years for investment to double in value
FAQs About Rule of 72
How to double money in 1 year?
one of the best ways to answer how to make money double and multiply your monthly income is by investing a portion either in a variety of investment plans like ULIPs, mutual funds, ETFs, bonds, stocks, etc.
What is the 8 4 3 rule?
Thumb rule, the first 8 years is a period where money grows steadily, the next 4 years is where it accelerates and the next 3 years is where the snowball effect takes place.
Conclusion
Rule of 72 means fomula that estimates the amount of time it takes for an investment to double in value ,earning a fixed annual rate of return is called rule of 72.It is simple
calculation is dividing 72 by the annual interset rate.