The Rule of 72
Want to know how long it will take for your money to double at a certain interest rate? Skip the financial calculator and use the rule of 72 to estimate the effects of compound interest.
- Just divide the number 72 by your target interest rate, and you get the approximate number of years that it will take for your money to double.
- If you were to invest in a 0.9% CD, it would take about 80 years for your money to double.
On the other hand, if you were to invest in a mutual fund with a 7% return, it would take your original funds about 10.28 years to double.
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