Research

     The Rule of 72 is a quick formula that is used to estimate the number of years required to double the invested money at a given annual rate of return.

• Take the number 72 and divide it by the projected annual rate of return. The result is the number of years, approximately it'll take for your money to double. i.e. if you have 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money. If it takes nine years to double a $1,000 investment, then the investment will grow to $2,000 in year 9, $4,000 in year 18, $8,000 in year 27, and so on. 

• The Rule of 72 applies to compounded interest rates and is reasonably accurate for interest rates that fall in the range of 6% and 10%.

• The Rule of 72 dates back to 1494 when Luca Pacioli referenced the rule in his comprehensive mathematics book called Summa de Arithmetica.