Many years back, I remember seeing some article/book talking about a way to calculate how fast (or slow) our money can be doubled with certain Annual Rate Of Return (in %). I've forgotten the exact rule but today I've chanced upon it again in one of the advertisement in Sunday Times. So, I thought just to blog about it to share (but I believed most of you might have already known) and as a reminder to myself.
It is called RULE OF 72.
To simply put, you take 72 and divide by the annual rate of return, you will get the number of years it takes to double your money.
For example :
Money Invested : $1,000
Annual Rate Of Returns : 10%
It will take 7.2 years to grow your money into $2,000
The formula = 72 /10
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