I have heard of the rule of 72, dealing with when your money doubles. Could you explain it better?
As a rough guide, divide the annual rate of interest being earned on an investment into 72. This gives an approximation of how many years it will take for your investment to double, assuming that interest is compounded annually. For example, if you are receiving an annual percentage yield of 4.00% on a certificate of deposit, you can expect your money to double at that rate of interest in about 18 years (72/4=18).
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As a rough guide, divide the annual rate of interest being earned on an investment into 72. This gives an approximation of how many years it will take for your investment to double, assuming that interest is compounded annually. For example, if you are receiving an annual percentage yield of 4.00% on a certificate of deposit, you can expect your money to double at that rate of interest in about 18 years (72/4=18).
