For example, for an investment earning 4%, it will take about 18 years (72/4) for the investment to double in value.
The Rule of 72 can also be used to estimate the interest rate necessary to double the value of an investment in a particular number of years.
Will investments double in 10 years?
The Rule of 72 states that the amount of time required to double your money equals 72 divided by your rate of return. For example: If you invest money at a 10 percent return, you will double your money every 7.2 years. If you invest at a 9 percent return, you will double your money every 8 years.
How can I double my money in 5 years?
This is the number of years it will take for your money to double. For example, if your money is earning an 8 percent interest rate, you’ll double your money in 9 years (72 divided by 8 equals 9). Or, if your money is earning a 5 percent interest rate, you’ll double it in 14.4 years (72 divided by 5 equals 14.4).
At what annual rate of interest compounded yearly Will money double in 8 years?
When interest is compounded annually, a single amount will double in each of the following situations: The Rule of 72 indicates than an investment earning 9% per year compounded annually will double in 8 years.
How long does it take for 401k to double?
For example, if you invest $10,000 at 10 percent compound interest, then the “Rule of 72” states that in 7.2 years you will have $20,000. You divide 72 by 10 percent to get the time it takes for your money to double. The “Rule of 72” is a rule of thumb that gives approximate results.