Have you ever heard about the rule of 72? It is a very simple yet powerful rule in the finance and investment world which every person should know about.
According to it, if you want to know in how many years your money will double in an amount at a given interest rate? Then you can find out easily using this rule. Suppose you invest $100 at a rate of 9% compound interest annually. Then all you have to do is divide 72 by 9 which is equal to 8. That is our answer, it means your money will double every 8 years.
No. of years to double your money at a given interest rate = 72/Given rate of interest.
It’s that simple and you can use this method to calculate returns of various asset classes and invest wisely.
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